legacyexternalwebsitefiles.balch.com · docket no. rm08 -7-000 2 (202) 50 2-6125...

124FERC¶ 61,071UNITED STATESOF AMERICA

FEDERAL ENERGYREGULATORY COMMISSION

18 CFRPart40

(DocketNo. RM08-7-000;OrderNo. 713)

Modificationof InterchangeandTransmissionLoadingRelief Reliability Standards;andElectric Reliability Organization Interpretationof Specific Requirementsof Four

Reliability Standards

(IssuedJuly21,2008)

AGENCY: Federal EnergyRegulatoryCommission.

ACTION: Final Rule.

SUMMARY: Pursuantto section 215of theFederal PowerAct, theFederalEnergy

Regulatory Commission(Commission)approvesfive of six modified Reliabilit y

Standardssubmitted to theCommissionfor approvalby theNorth AmericanElectric

Reliability Corporation (NERC). TheCommissiondirectsNERCto submit a filing that

providesan explanationregardingoneaspectof thesixth modified Reliabili ty Standard

submittedby NERC. TheCommissionalso approvesNERC’s proposedinterpretations

of five specificrequirementsof Commission-approvedReliabilit y Standards.

EFFECTIVE DATE: This rulewill becomeeffective [30 days after publication in the

FEDERAL REGISTER]

FOR FURTHERINFORMATION CONTACT:

PatrickHarwood(Technical Information)Office of Electric ReliabilityFederalEnergyRegulatoryCommission888First Street,NEWashington,DC 20426

20080721-3054 FERC PDF (Unofficial) 07/21/2008

DocketNo. RM08-7-000 2

(202)[email protected]

ChristopherDaignault(LegalInformation)Office of theGeneralCounselFederalEnergyRegulatoryCommission888First Street,NEWashington,DC 20426(202)[email protected]

SUPPLEMENTARY INFORMATION:


124FERC¶ 61,071UNITED STATESOF AMERICA

FEDERAL ENERGYREGULATORY COMMISSION

Modificationof InterchangeandTransmissionLoadingRelief Reliability Standards; andElectricReliabili tyOrganizationInterpretationof Specific RequirementsofFour Reliability Standards

DocketNo. RM08-7-000

ORDER NO. 713

FINAL RULE

TABLE OF CONTENTS

ParagraphNumbers

I. Background....................................................................................................................2.A. EPAct2005andMandatoryReliabilit y Standards..................................................2.B. NERC Filings...........................................................................................................6.C. Noticeof Proposed Rulemaking.............................................................................11.

II. Discussion...................................................................................................................13.A. NERC’sDecember 19,2007Filing: Interpretationsof Reliabil ity Standards......13.

1. BAL-001-0 – RealPowerBalancingControlPerformanceandBAL-003-0 –FrequencyResponseandBias.................................................................................14.

a. ProposedInterpretation..................................................................................16.b. Comments.......................................................................................................19.c. CommissionDetermination............................................................................20.

2. RequirementR17of BAL-005-0 – AutomaticGeneration Control...................23.a. ProposedInterpretation..................................................................................23.b. Comments.......................................................................................................26.

i. Whether interpretation coulddecreaseaccuracyof frequencyandtime errormeasurements..................................................................................................26.ii. Whatconditionswouldprecluderequirementto calibratedevices...........28.iii. Whetheraccuracyof devices is assuredby otherrequirements...............30.

c. CommissionDetermination............................................................................32.3. RequirementsR1 andR2 of VAR-002-1 GeneratorOperation for MaintainingNetworkVoltageSchedules....................................................................................35.

a. ProposedInterpretations.................................................................................35.b. Comments.......................................................................................................39.c. CommissionDetermination............................................................................40.

B. NERC’s December 21,2007Filing: Modification of TLR Procedure.................41.


DocketNo. RM08-7-000 ii

1. Background.........................................................................................................42.2. EROTLR Filing, Reliability Standard IRO-006-4 ...........................................43.3. NOPR..................................................................................................................44.4. Comments...........................................................................................................45.5. CommissionDetermination................................................................................46.

C. NERC’s December 26,2007Filing: Modification to Five “ InterchangeandScheduling” Reliabilit y Standards...............................................................................51.

1. INT-001-3 – InterchangeInformationand INT-004-2 – DynamicInterchangeTransaction Modifications.......................................................................................52.

a. Comments.......................................................................................................56.b. Commission Determination...........................................................................57.

2. INT-005-2 – InterchangeAuthority DistributesArrangedInterchange,INT-006-2 – Responseto InterchangeAuthority, and INT-008-2 – InterchangeAuthorityDistributesStatus.....................................................................................................58.

a. Comments.......................................................................................................66.b. Commission Determination...........................................................................67.

III. Information Collection Statement.............................................................................68.

IV. EnvironmentalAnalysis ............................................................................................71.

V. RegulatoryFlexibility Act ..........................................................................................72.

VI. DocumentAvailability ..............................................................................................73.

VII. EffectiveDateandCongressionalNotification.......................................................76.


UNITED STATESOF AMERICAFEDERAL ENERGYREGULATORY COMMISSION

BeforeCommissioners:JosephT. Kelliher, Chairman;SuedeenG. Kelly, Marc Spitzer,Philip D. Moeller, andJon Wellinghoff.

Modificationof InterchangeandTransmissionLoadingRelief Reliability Standards; andElectricReliabili tyOrganizationInterpretationof Specific RequirementsofFour Reliability Standards

DocketNo. RM08-7-000

ORDER NO. 713

FINAL RULE

(IssuedJuly21,2008)

1. Pursuantto section215of theFederalPowerAct (FPA),1 theCommission

approvesfive of six modifiedReliability Standardssubmittedto theCommissionfor

reviewby theNorth AmericanElectric Reliabil ity Corporation (NERC). Thefive

Reliability Standardspertainto interchangescheduling andcoordination. The

Commission directsNERCto submit a fil ing thatprovidesan explanation regardingone

aspectof thesixth modified Reliability Standard submittedby NERC,whichpertainsto

transmissionloading relief (TLR) procedures.TheFinal Rulealsoapproves

interpretationsof five specificrequirementsof Commission-approvedReliabili ty

Standards.

1 16U.S.C.824o(2006).



I. Background

A. EPAct 2005 and Mandatory Reliability Standards

2. Section 215of theFPA requiresa Commission-certifi edElectric Reliability

Organization(ERO)to proposeReliability Standardsfor theCommission’s review. Once

approvedby theCommission, theReliabili ty Standardsmaybeenforcedby theERO,

subjectto Commissionoversight, or by theCommissionindependently.2

3. Pursuantto section215of theFPA, theCommissionestablished aprocessto select

andcertify anERO3 and,subsequently,certified NERC astheERO.4 OnApril 4, 2006,

asmodifiedonAugust 28,2006,NERCsubmittedto theCommission apetition seeking

approvalof 107proposedReliability Standards. On March16,2007,theCommission

issuedaFinal Rule, Order No. 693,approving 83of these107Reliabili ty Standardsand

directingotheraction relatedto theseReliability Standards.5 In addition, pursuantto

2 SeeFPA 215(e)(3), 16 U.S.C.824o(e)(3) (2006).

3 RulesConcerningCertification of theElectric Reliability Organization;andProceduresfor theEstablishment,Approval, andEnforcement of Electric Reliabili tyStandards, OrderNo. 672,FERCStats. & Regs.¶ 31,204,orderon reh’g, OrderNo. 672-A, FERCStats.& Regs. ¶ 31,212(2006).

4 NorthAmericanElectricReliability Corp., 116 FERC ¶ 61,062(EROCertification Order), orderon reh’g & compliance, 117FERC¶ 61,126(ERORehearingOrder) (2006), appealdocketed subnom. Alcoa,Inc.v. FERC, No. 06-1426(D.C. Cir.Dec.29,2006).

5 Mandatory Reliability Standards for theBulk-PowerSystem, OrderNo. 693,FERCStats.& Regs.¶ 31,242,orderon reh’g, OrderNo. 693-A, 120FERC¶ 61,053(2007).



section215(d)(5) of theFPA, theCommissiondirectedNERCto developmodifications

to 56of the83approvedReliability Standards.

4. In April 2007,theCommissionapproveddelegationagreementsbetweenNERC

andeachof theeight RegionalEntities, including theWesternElectricity Coordinating

Council(WECC).6 Pursuantto suchagreements, theERO delegated responsibility to the

RegionalEntitiesto carry out compliancemonitoringandenforcement of themandatory,

Commission-approvedReliability Standards. In addition, theCommission approvedas

partof eachdelegationagreement a Regional Entity processfor developingregional

Reliability Standards.

5. NERC’s Rulesof Procedureprovidethata personthatis “di rectly andmaterially

affected”by Bulk-PowerSystemreliability mayrequestaninterpretation of aReliability

Standard.7 TheERO’s“standardsprocessmanager”will assemble a teamwith relevant

expertiseto addresstheclarificationandalsoform aballot pool. NERC’sRulesprovide

that,within 45days,theteamwill draft aninterpretationof theReliability Standard,with

subsequentballoting. If approvedby ballot, the interpretationisappendedto the

6 SeeNorth AmericanElectricReliability Corp., 119FERC ¶ 61,060,orderonreh’g, 120FERC ¶ 61,260(2007).

7 NERCRulesof Procedure,Appendix3A (Reliability StandardsDevelopmentProcedure), at 26-27.



Reliability Standard andfiled with theapplicableregulatory authority for regulatory

approval.8

B. NERC Filings

6. As explained in theNoticeof ProposedRulemaking (NOPR),9 this rulemaking

proceedingconsolidatesandaddresses threeNERCfili ngs.

7. OnDecember19,2007,NERCsubmittedfor Commissionapprovalfive

interpretationsof requirementsin four Commission-approvedReliability Standards:

BAL-001-0 (Real PowerBalancingControl Performance),RequirementR1;BAL-003-0

(FrequencyResponseandBias),Requirement R3;BAL-005-0 (Automatic Generation

Control), RequirementR17;andVAR-002-1 (Generator Operation for Maintaining

NetworkVoltageSchedules),RequirementsR1andR2.10 OnApril 15,2008,NERC

submittedapetition to withdrawtheearlier request for approval of NERC’sinterpretation

8 We notethattheNERCboard of trusteesapprovedtheinterpretationsofReliability Standardssubmittedby NERCfor approvalin thisproceeding.However,Appendix3A of NERC’sRulesof Procedureis silenton NERCboardof trusteesapproval of interpretationsbefore theyarefi ledwith theregulatoryauthority. TheCommission is concernedthat NERC’s Rulesof Proceduredonot properly reflectthisapprovalstep.

9 Modificationof InterchangeandTransmission Loading Relief ReliabilityStandards;andElectricReliability Organization Interpretation of SpecificRequirementsof FourReliability Standards, Noticeof ProposedRulemaking,73FR 22,856(Apr. 28,2008), FERCStats.& Regs. ¶ 32,632(2008)(NOPR).

10 In its fi ling, NERCidentifiestheReliability Standardstogetherwith NERC’sproposedinterpretationsasBAL-001-0a,BAL-003-0a,BAL-005-0a,andVAR-002-1a.



of BAL-003-0, RequirementR17, and insteadto approveasecondinterpretation of

Requirement R17 submittedby NERC in theApril 15 fi ling.

8. OnDecember21,2007,NERCsubmittedfor Commissionapprovalmodifications

to Reliabili ty StandardIRO-006-4 (Reliability Coordination– Transmission Loading

Relief) that appliesto balancingauthorities, reliability coordinators,andtransmission

operators. According to NERC, themodifications“extract” from theReliabili ty Standard

thebusinesspracticesandcommercial requirementsfrom thecurrent IRO-006-3

Reliability Standard. Thebusinesspracticesandcommercialrequirementshavebeen

transferredto aNorth AmericanEnergyStandardsBoard(NAESB)businesspractices

document. TheNAESBbusinesspracticesandcommercial requirementshavebeen

includedin Version001of theNAESB WholesaleElectric Quadrant(WEQ) Standards

whichNAESBfiled with theCommissionon thesameday,December21,2007.11

Further, themodifiedReliability Standard includeschangesdirectedby theCommission

in OrderNo. 693relatedto theappropriatenessof usingtheTLR procedureto mitigate

violationsof interconnectionreliability operatinglimits (IROL).12

9. OnDecember26,2007,NERCsubmittedfor Commissionapprovalmodifications

to five Reliability Standardsfrom the“InterchangeScheduling” (INT) groupof

11 NAESBDecember21, 2007Filing, DocketNo. RM05-5-005.

12 An IROL is asystemoperatinglimit that,if violated, could leadto instabili ty,uncontrolledseparation,or cascadingoutagesthatadversely impactthe reliabili ty of theBulk-Power System.



Reliability Standards: INT-001-3 (Interchange Information); INT-004-2 (Dynamic

InterchangeTransactionModifications);INT-005-2 (InterchangeAuthority Distributes

ArrangedInterchange);INT-006-2 (Responseto InterchangeAuthority); andINT-008-2

(InterchangeAuthority DistributesStatus).NERCstated thatthemodificationsto

INT-001-3 andINT-004-2 eliminatewaiversrequestedin 2002underthevoluntary

Reliability Standardsregimefor entities in theWECCregion. According to NERC,

modificationsto INT-005-2, INT-006-2, andINT-008-2 adjustreliability assessmenttime

framesfor proposedtransactionswithin WECC.13

10. EachReliability Standardthat theEROproposed to interpretor modify in this

proceedingwasapprovedby theCommissionin OrderNo. 693.

C. Notice of Proposed Rulemaking

11. On April 21,2008,theCommissionissueda NOPRthatproposedto approve the

six modified Reliability Standardssubmittedto theCommission for approvalby NERC

andto approveNERC’sproposedinterpretationsof five specific requirementsof

Commission-approvedReliability Standards. On May 16,2008,theCommission

supplementedtheNOPR,14 proposing to approveNERC’s modified interpretation of

Reliability Standard BAL-005-0, Requirement R17.

13 TheReliability Standardsandinterpretationsaddressed in thisFinal Ruleareavailable on theCommission’s eLibrary document retrieval systemin DocketNo. RM08-7-000andalsoonNERC’s website,http://www.nerc.com.

14 Modifi cation of InterchangeandTransmissionLoadingRelief Reliabili tyStandards;andElectricReliability Organization Interpretation of SpecificRequirements

(continued)



12. In responseto theNOPR, commentswere fil edby thefollowing eight interested

persons:Alcoa Inc. (Alcoa); IndependentElectricity SystemOperatorof Ontario (IESO);

ISO/RTO Council; InternationalTransmission Company,MichiganElectric

TransmissionCompany,LLC andMidwest LLC (collectively, ITC); LafayetteUtiliti es

andtheLouisianaEnergy andPowerAuthority (LafayetteandLEPA); NERC; NRG

Companies;15 andSouthern CompanyServices,Inc. (Southern).

II. Discussion

A. NERC’s December 19, 2007 Filing: Interpretations of ReliabilityStandards

13. As mentionedabove,NERC submittedfor Commission approvalinterpretationsof

five specificrequirementsin four Commission-approvedReliability Standards.

1. BAL-001-0 – Real Power Balancing Control Performance and BAL-003-0 – Frequency Response and Bias

14. Thepurposeof Reliability Standard BAL-001-0 is to maintain interconnection

steady-state frequencywithin defined limitsby balancing realpower demandand supply

in real-time.16 It usestwo averages, coveringtheone-minuteandten-minuteareacontrol

of FourReliability Standards,Supplemental Noticeof ProposedRulemaking, 73FR30,326(May 27,2008), FERC Stats.& Regs.¶ 32,635(2008)(SupplementalNOPR).

15 NRG CompaniesincludesLouisianaGenerating LLC, BayouCovePeakingPowerLLC, Big CajunI PeakingPowerLLC, NRGSterlingtonPowerLLC, andNRGPowerMarketing,LLC.

16 SeeReliability StandardBAL-001-0. EachReliability Standard developedbytheEROincludesa “Purpose”statement.



error (ACE) performance(CPS1andCPS2, respectively), as measuresfor determining

compliancewith its four Requirements.Requirement R1 of BAL-001-0 obligates each

balancingauthority, on a rolling twelve-month basis, to maintain its clock-minute

averagesof ACE, modifiedby its frequencybiasandtheinterconnection frequency,

within aspecific limit basedonhistoricperformance.17

15. Thepurposeof Reliability Standard BAL-003-0 is to ensurethatabalancing

authority’s frequencybiassettingis accuratelycalculatedto matchits actual frequency

response. Frequencybiasmay becalculatedin anumberof waysprovidedthatthe

frequencybias is ascloseaspractical to thefrequency response.RequirementR3of

BAL-003-0 requireseachbalancingauthority to operateits automatic generation control

on “ tie line frequencybias,” unlesssuchoperationisadverseto systeminterconnection

reliabili ty.18

17 Frequencybiasis anapproximation,expressedin megawattsper0.1Hertz, ofthe frequency responseof abalancingauthority areawhich estimatesthenetchangeinpower from thegeneratorsthat is expectedto occurwith a changein interconnectionfrequencyfrom thescheduledfrequency(which is normally60 Hertz).

18 Automatic generationcontrol refersto anautomatic processwherebyabalancingauthority’s mix andoutputof itsgenerationanddemand-sidemanagementisvariedto offsettheextentof supplyanddemand imbalancesreflectedin itsACE. NorthAmericanElectricReliability Corporation, 121FERC¶ 61,179,atP 19n.14(2007).“Tie line frequency bias” is defined in the NERCGlossaryof TermsUsedin ReliabilityStandardsas“ [a] modeof AutomaticGeneration Control thatallows theBalancingAuthority to 1.) maintainits InterchangeScheduleand2.) respond to Interconnectionfrequencyerror.”



a. Proposed Interpretation

16. In itsDecember19,2007filing, NERC explainedthatWECCrequestedtheERO

to providea formal interpretationwhethertheuseof WECC’sexistingautomatictime

error correction factor thatis appliedto thenetinterchangeportion of theACE equation

violatesRequirement R1of BAL-001-0 or RequirementR3 of BAL-003-0.

17. In response,theERO interpretedof BAL-001-0 Requirement R1 asfollows:

� The[WECCautomatictimeerrorcorrection or WATEC] proceduraldocumentsaskBalancingAuthorities to maintain rawACEfor[control performancestandardor CPS] reporting andto controlviaWATEC-adjusted ACE.

� As longasBalancingAuthorities useraw (unadjustedfor WATEC)ACE for CPSreporting purposes,theuseof WATECfor control isnot in violationof BAL-001 Requirement1.

TheEROinterpreted BAL-003-0 RequirementR3asfollows:

� Tie-LineFrequencyBiasis oneof thethreefoundational controlmodesavailable in a BalancingAuthority’s energymanagementsystem.(Theothertwo areflat-tie and flat-frequency.) ManyBalancing Authoritieslayerothercontrolobjectiveson top of theirbasiccontrolmode,suchasautomaticinadvertentpayback,[controlperformancestandard]optimization,[and] timecontrol(in single[balancingauthority] interconnections).[19]

� As longasTie-Line FrequencyBias is theunderlying control modeandCPS1is measuredandreportedon theassociatedACE

19 The “flat frequency” controlmodewould increaseor decreasegenerationsolelybasedon theinterconnectionfrequency. The“flat tie” modewould increaseor decreasegeneration within a balancingauthorityareadependingsolely on thatbalancingauthority’s total interchange.The“tie-line frequencybias” modecombinestheflatfrequencyandflat tie modesand adjusts generationbasedon thebalancing authority’snetinterchangeandtheinterconnection frequency.



equation,[20] thereis no violationof BAL-003-0 Requirement3:

ACE = (NIA− NIS) – 10B(FA − FS) − IME

(NERC December 19,2007Filing,Ex. A-3.)

18. In theNOPR,theCommissionproposedto approvetheERO’s formal

interpretationsof RequirementR1 of BAL-001-0 andRequirementR3of BAL-003-0.

b. Comments

19. NERC andIESOsupporttheCommission’sproposal to approvethese

interpretations.

c. Commission Determination

20. TheCommissionapprovestheERO’s formal interpretationsof Requirement

R1of BAL-001-0 andRequirementR3of BAL-003-0. TheERO’sinterpretation of

BAL-001-0, RequirementR1, is reasonable in thatit requiresall balancingauthorities in

WECC to calculateCPS1andCPS2asdefinedin theRequirements. Thus,the

interpretationupholds thereliability goalto minimizethefrequencydeviationof the

interconnectionby constantlybalancingsupplyanddemand.

21. TheERO’s interpretationof BAL-003-0, RequirementR3 isappropriatebecauseit

maintainsthegoal of Requirement R3 by obligating abalancing authority to operate

automaticgenerationcontrolon tie-line frequencybiasas itsunderlying control mode,

unlessto dosois adverseto systemor interconnection reliabilit y. Further, the

20 “CPS1”refers to RequirementR1 of BAL-001-0.



interpretationfostersthepurposeof RequirementR3asit allowsthatabalancing

authority may gobeyondRequirementR3and “ layerothercontrol objectiveson topof

their basiccontrol modes, suchasautomaticinadvertentpayback,[control performance

standard]optimization,[and] timecontrol(in single [balancingauthority]

interconnections),” 21 althoughsuchlayering is not requiredby theReliability Standard.

22. For thereasonsstatedabove,theCommissionfindsthattheERO’sinterpretations

of Requirement R1 of BAL-001-0 andRequirementR3of BAL-003-0 arejust,

reasonable, notundulydiscriminatory or preferential, andin thepublic interest.

Accordingly, theCommissionapproves theERO’s interpretations.

2. Requirement R17 of BAL-005-0 – Automatic Generation Control

a. Proposed Interpretation

23. Requirement R17of Reliability StandardBAL-005-0 is intendedto annually

checkandcalibratethetimeerrorandfrequencydevicesunderthecontrol of the

balancingauthority thatfeeddatainto automatic generation control necessary to calculate

ACE. RequirementR17mandatesthatthebalancingauthority mustadhereto an annual

calibration programfor timeerror andfrequencydevices. Therequirementstatesthat a

balancingauthority mustadhere to minimum accuraciesin termsof rangesspecified in

Hertz,volts,amps,etc.,for variouslisteddevices, suchasdigital frequencytransducers,

21 NERC interpretation of BAL-003-0, RequirementR3.



voltagetransducers, remoteterminalunit, potential transformers,andcurrent

transformers.

24. OnApril 15,2008,NERCsubmittedaninterpretation of Requirement R17

regardingthetypeandlocationof theequipmentto whichRequirementR17applies.22

TheinterpretationprovidesthatBAL-005-0, RequirementR17

appliesonly to thetime errorandfrequencydevicesthatprovide,or in thecaseof back-upequipmentmayprovide,inputinto thereporting orcompliance ACE equationor providereal-time timeerroror frequencyinformationto thesystemoperator. Frequencyinputsfrom othersourcesthatarefor referenceonly areexcluded.Thetime errorandfrequencymeasurementdevicesmaynotnecessarily belocatedin thesystemoperationscontrol roomor ownedby theBalancingAuthority; howevertheBalancingAuthority hasthe responsibilit y for theaccuracyof thefrequencyand timeerror devices….

Newor replacementequipmentthatprovidesthesamefunctionsnotedaboverequires thesamecalibrations. Somedevicesusedfor time errorandfrequency measurement cannotbecalibratedassuch. In this case,thesedevicesshouldbecross-checkedagainst otherproperly calibratedequipmentandreplaced if thedevicesdo not meettherequiredlevelofaccuracy.

25. In asupplementalNOPRissuedMay 16,2008, theCommissionproposedto

approveNERC’sinterpretationof BAL-005-0, RequirementR17. In addition, the

Commission noted thattie-line megawatt meteringdata is animportantaspectof ensuring

theaccuratecalculation of ACE, andtheinterpretation limi ts thespecificaccuracy

requirementsof RequirementR17to frequencyandtime error measurementdevices.The

22 As mentionedearlier, in April 2008,NERCsubmitted apetition seekingtowithdrawanearlier interpretationof RequirementR17andsubstitutinganewinterpretationfor Commission approval.



Commission askedfor commenton (1) whether theinterpretation could decreasethe

accuracyof frequencyandtimeerror measurementsby not requiring calibration of tie-

line megawattmeteringdevices; (2) whatconditionswould precludetherequirementto

calibrate thesedevices; and(3) whethertheaccuracyof thesedevicesis assuredby other

requirementswithin BAL-005-0 in theabsenceof calibration.

b. Comments

i. Whether interpretation could decrease accuracy of frequencyand time error measurements

26. Southern,ITC, ISO/RTO Council, andNERCclaimthattheinterpretation could

notdecreasetheaccuracyof frequencyandtime error measurementsby not requiring

calibration of tie-line megawatt metering devicesbecausetie-linemeteringdata is notan

input to eithertime erroror frequencymeasurementsandhasno impacton theaccuracy

of thesedevices.NERC furthersuggests thattheCommission mayhaveintendedto ask

whethertheinterpretation adverselyaffects theaccuracyof thebalancingauthority ACE

calculation. NERCprovides thatit doesnot, becausecalibrationof tie-linemetering

historically wasincludedin theguidesectionof NERC OperatingPolicy 1 andwasnot

intendedto betranslatedinto a requirement. NERCasserts thatcalibrationof tie-line

metering remainsa soundpracticeandtherearesafeguards,checks,andbalancesto

ensureinadvertentflows in theinterconnectionequal zero,thusensuringthaterrorsin

ACE arebounded to protecttheinterconnections.

27. As ageneral commenton theproposedinterpretationof RequirementR17,

Southernsuggeststhatthemeteringspecificationstable in RequirementR17maybe



creatingsomeconfusionbecause theNERCcommitteethatdevelopedthisReliabil ity

Standard intendedto includethefrequencymeteringspecificationsfrom this tablebut

inadvertentlyincludedothermeteringspecificationsthatarenot requiredto fulfill

Requirement R17. Southern claimsthatRequirement R17is intendedto only address

timeerror andfrequencydevices,andthis tablewasaddedin error andshould havebeen

limited to specificationsfor thosedevices.

ii. What conditions would preclude requirement to calibratedevices

28. NERC,ISO/RTOCouncil,andSouthern claim thatthere arenoconditionswhich

wouldprecludetherequirementto calibratetie-line megawatt metering devices. NERC

suggests that, if thequestion relates to apossible newrequirementto calibrateall tie-line

meteringequipmenton agivenschedule,a newstandardsauthorizationrequestshouldbe

submittedthroughtheReliability StandardsDevelopmentProcess.NERCbelievesthat

the industry maynotwantto divert resourcesawayfromother importanttasksunlessa

casecanbemadethat calibrationof thesedevicespresents a risk to reliabilit y. Similarly,

ITC commentsthat,if theCommissionbelievesit is necessary to annually calibratethe

tie-line megawatt metering devices, sucha requirementbelongs in BAL-005-0 andnot in

Requirement R17. ISO/RTOCouncilclaimssucha requirementis unnecessarybecause

it is redundant,not neededfor reliability, andposesthepossibili ty of financial sanctions

for no goodreason.

29. ITC statesthattie-line meterswould beprecludedfrom calibration requirementsif

theyaredigital devicesthattheequipmentvendorhasindicateddo not require



calibration. Theyclaim thatthere areno field calibrationprocedureswhichcanbe

performedby end-usersfor suchdevices.According to ITC, RequirementR17of

BAL-005-0 shouldrecognizethatthereare modern digital devicesthatdonot require

calibration asanalogdevicesdo.

iii. Whether accuracy of devices is assured by other requirements

30. NERC,ITC, ISO/RTO Council, and Southern statethattie-linemeteringaccuracy

is addressedby RequirementR13of BAL-005-0, which requireseachbalancing authority

to performhourlyerrorchecksusing tie-line megawatt-hour meterswith commontime

synchronizationto determinetheaccuracyof its control equipmentandmakeadjustments

accordingly. ITC claimsthatRequirementR13of BAL-005-0 providesa more timely

identificationof errorsthana requirementfor annualcalibration.

31. NERC commentsthattie-line meteringaccuracyis notassuredby any other

requirement. Accordingto NERC, requirements relating to Reliability StandardsBAL-

005-0 andBAL-006-1, alongwith theassociatedNERCprocesses, provideseveral layers

of overlappingprotection to address tie-lineaccuracy. NERCfurtherclaimsthatBAL-

005-0 requiresbalancing authoritiesto operatein conformancewith commonmetering

equipmentin comparison to thatof their neighbors,so there is no netbalancingauthority

error in theinterconnectionasawhole. In addition,NERCclaimsthatmanybalancing

authoritieshavesecondary or backupmeteringoncritical tie linesandhaveaccessto the

NERCResourceAdequacyapplication,whichcanprovidealerts to thebalancing

authority of tie-line meteringerrors.




32. TheCommissionapprovestheERO’s formal interpretation of Requirement R17of

BAL-005-0 assetforth in theERO’s April 2008 fili ng. Basedon thecomments,we find

that this interpretation will notdecreasetheaccuracyof frequencyandtimeerror

measurementsby not requiringcalibration of tie-line megawatt meteringdevices. In

addition,wearepersuadedby thecommentersthattheneedto calibrate tie-line megawatt

meteringdevices is addressedby otherrequirementssuchasRequirementR13that

requirehourlychecks to ensurecontinuousaccuracy. TheCommissionnotesthatthe

applicable requirementfor theaccuracyof calibrationof tie-line megawatt metering

devicesis identified in RequirementR17. While Southernhasstatedthatthemetering

specificationstablein RequirementR17wasadded in error, aninterpretation cannot

changethesubstanceof aReliability Standard. Notwithstanding thequestionof

relevancyof particularcomponentsof themeteringspecificationstable, theaccuracy

requirementsof this tableremainpartof Reliabilit y StandardBAL-005-0 asreferencefor

mandatory reliabilit y practices. TheCommissionencouragesfurtherclarification of tie-

line metering devicecalibrationrequirements throughtheERO standardsdevelopment

process.

33. ITC commentsthatdigital devicesareprecludedfrom thecalibration requirement.

We notethat theinterpretationprovidesthat“ [s]omedevicesusedfor timeerror and

frequencymeasurementcannotbecalibratedassuch. In this case,thesedevicesshould

becross-checkedagainstotherproperly calibratedequipmentandreplacedif thedevices



donot meet therequiredlevelof accuracy.” Thus,while ITC’s commentis accurate, the

ERO’s interpretation acknowledgestheconcernandprovidesa response,i.e.,modern

digital devicesthat cannotbecalibratedmust becross-checkedagainstotherequipment

andreplacedif theydo not meettherequiredlevelof accuracy.

34. TheERO’s interpretationof BAL-005-0, RequirementR17providesthat

“f requencyinputsfrom othersourcesthatarefor referenceonly areexcluded.” The

Commission notes that thisReliability Standardestablishesrequirementsconcerningthe

inputsto theACE equationto correctlyoperateautomatic generation control. Frequency

inputsusedfor otherpurposesarenot coveredby this Reliability Standard. Therefore,

weunderstandtheERO’sinterpretationto excludefrequencydevicesthatdonotprovide

input into thereportingor compliancewith theACE equationor providereal-time time

error or frequency informationto thesystemoperator. Any devicesthatprovide

referenceinput from whichabalancingauthority calibratesothertimeerror and

frequencydevices, however, doprovidereal-timetimeerror andfrequencyinformation

to thesystem operator andtherefore mustbecalibratedunder this requirement.

3. Requirements R1 and R2 of VAR-002-1 Generator Operation forMaintaining Network Voltage Schedules

a. Proposed Interpretations

35. Thestatedpurpose of Reliability StandardVAR-002-1 is to ensurethatgenerators

providereactive and voltagecontrol necessary to ensurethat voltagelevels,reactive

flows,andreactive resourcesare maintainedwithin applicable facility ratingsto protect



equipmentandthereliableoperationof theinterconnection. RequirementR1ofVAR-

002-1 provides:

TheGeneratorOperator shall operateeachgenerator connectedtothe interconnectedtransmission systemin theautomatic voltagecontrol mode(automaticvoltageregulator in serviceandcontrollingvoltage)unlesstheGeneratorOperatorhasnotified theTransmissionOperator.

Requirement R2 provides:

Unlessexempted by theTransmissionOperator, eachGeneratorOperatorshall maintainthegenerator voltageor Reactive Poweroutput(within applicableFacility Ratings) asdirectedby theTransmissionOperator.

36. TheEROreceiveda request to providea formal interpretationof Requirements

R1andR2. Therequestfirst askedwhetherautomatic voltageregulatoroperation in the

constantpowerfactoror constant Mvar modescomplieswith RequirementR1. Second,

the requestaskedtheERO whether RequirementR2 gives thetransmissionoperatorthe

optionof directing thegeneration ownerto operatetheautomatic voltageregulatorin the

constantpowerfactoror constant Mvar modesratherthantheconstantvoltagemode.

37. NERC’s formal interpretationprovidesthata generatoroperator that is operating

its automatic voltageregulator in theconstantpower factoror constantMvar modesdoes

not complywith RequirementR1.23 Theinterpretationrestson theassumptions thatthe

generator has thephysical equipmentthatwil l allow suchoperation andthatthe

23 NERC’sinterpretation of VAR-002-1, RequirementR1 is quotedin full in theNOPR,FERCStats.& Regs.¶ 32,632at P32,n.27.



transmissionoperator hasnotdirectedthegenerator to run in a modeotherthanconstant

voltage. Theinterpretationalso providesthatRequirementR2 gives thetransmission

operator the optionof directingthegeneration operator to operate theautomatic voltage

regulatorin theconstant powerfactoror constantMvar modesratherthantheconstant

voltagemode.

38. In theNOPR,theCommissionproposedto approvetheERO’s interpretationof

Requirement R1 andRequirementR2of VAR-002-1.

b. Comments

39. NERC andIESOsupporttheCommission’sproposal to approvethe interpretation.


40. TheCommissionconcludesthattheinterpretationis just, reasonable,notunduly

discriminatory or preferential,andin thepublic interest. Therefore, theCommission

approves theERO’sinterpretationof RequirementsR1andR2 of VAR-002-1.

B. NERC’s December 21, 2007 Filing: Modification of TLR Procedure

41. NERC submittedfor Commissionapproval proposedReliability Standard

IRO-006-4, which modifiestheCommission-approvedReliability Standard, IRO-006-3.

1. Background

42. In OrderNo. 693,theCommissionapprovedanearlier versionof thisReliability

Standard, IRO-006-3. ThisReliability Standard ensuresthata reliability coordinator has

acoordinatedtransmissionservicecurtailmentandreconfiguration methodthatcanbe

usedalongwith otheralternatives,suchasredispatchor demand-sidemanagement,to



avoidtransmissionlimit violationswhenthetransmission systemiscongested.

Reliability Standard IRO-006-3 established a detailedTLR procedurefor use in the

EasternInterconnection to alleviateloadingson thesystemby curtailing or changing

transactions based on their prioritiesandtheseverity of thetransmissioncongestion. The

Reliability Standard referencedotherproceduresfor WECCandElectric Reliability

Councilof Texas(ERCOT).24

2. ERO TLR Filing, Reliability Standard IRO-006-4

43. In itsDecember2007filing, NERCsubmittedfor Commissionapproval a

modifiedTLR procedure,Reliability Standard IRO-006-4, which containsfive

requirements. Requirement R1 obligatesa reliability coordinatorexperiencingapotential

or actualsystemoperatinglimit (SOL) or IROL violation within its reliability coordinator

areato select oneor moreproceduresto providetransmission loading relief. The

requirementalsoidentifiestheregionalTLR proceduresin WECCandERCOT.

3. NOPR

44. In theNOPR, theCommissionproposed to approveIRO-006-4 as just, reasonable,

notundulydiscriminatoryor preferential,and in thepublic interest.25 TheCommission

alsoproposedto approvetheReliability Standardbasedon theinterpretation thatusinga

24 Theequivalentinterconnection-wideTLR proceduresfor use in WECCandERCOTareknownas“WSCC Unscheduled Flow Mitigation Plan” andsection 7 of the“ERCOT Protocols,”respectively.

25 NOPR,FERC Stats.& Regs.¶ 32,632at P48.



TLR procedure to mitigateanIROL violation is aviolationof theReliabili ty Standard.

TheCommissionaskedfor commentson whetheranycompromisein thereliability of the

Bulk-Power Systemmayresultfrom theremoval andtransfer to NAESBof thebusiness-

relatedissues formerlycontainedin Reliabili ty StandardIRO-006-3. In addition, the

Commission proposedto direct theEROto modify theviolation risk factorsassigned to

RequirementsR1 throughR4by raising themto “high.”

4. Comments

45. TheCommission received commentson theNOPRproposal. BecausetheFinal

Ruledoesnotapproveor remand theproposedReliabili ty Standard and,rather,directs

theEROto submita filing that providesanexplanation regarding specific languageof

onerequirementof IRO-006-4, theCommissionwill addressthecomments in a future

issuancein thisproceeding.

5. Commission Determination

46. BecausetheCommissionhasconcernregardingtheunderstandingof certain

languageof RequirementsR1andR1.1of IRO-006-4, theCommissionis notapproving

or remandingtheproposedReliability Standardat this time. Rather,theCommission

directsthat theERO,within 15daysof theeffectivedateof thisFinal Rule,submit a

fil ing thatprovidesanexplanationregardingspecific languageof Requirements R1and

R1.1 of IRO-006-4. TheCommission wil l then issueanoticeallowing public comment

on theERO’sfiling, andwill act on theproposedReliability Standardin a future issuance

in this proceeding.



47. In theFinal BlackoutReport, aninternationalteamof expertsstudying thecauses

of theAugust2003blackoutin NorthAmerica recommended thatNERC“[c]l arify that

the transmissionloadingrelief (TLR) processshouldnot beusedin situationsinvolving

anactualviolation of an OperationSecurity Limit.”26 Basedon theFinal Blackout

Report recommendation, theCommission, in OrderNo. 693, directedNERCto developa

modification to theTLR procedure(IRO-006-3) that“(1) includesaclearwarning that

theTLR procedure is aninappropriateandineffective tool to mitigateactualIROL

violationsand(2) identifiesin aRequirementtheavailablealternativesto mitigatean

IROL violationotherthanuseof theTLR procedure.”27

48. In responseto this directive, NERCproposedin RequirementR1.1of IRO-006-4

that “[t ]heTLR procedure[for theEasternInterconnection] aloneis aninappropriateand

ineffective tool to mitigatean IROL violation dueto thetime requiredto implementthe

procedure.” (Emphasisadded.) TheCommission isconcernedwhetherthis languageis

adequate to satisfytheconcernof theFinal BlackoutReport and Order No. 693.

Specifically, wenotethat theuseof theterm“alone” seems to imply that aTLR

procedurecouldbeusedin responseto anactual violationof an IROL whereastheFinal

BlackoutReport recommendation would preventtheuseof theTLR procedurein such

26 SeeU.S.-CanadaPower SystemOutageTask Force, FinalReport on theAugust14,2003Blackout in theUnitedStatesand Canada:CausesandRecommendations, at163(April 2004)(Final BlackoutReport) (Recommendation31).

27 SeeOrderNo. 693,FERCStats.& Regs.¶ 31,242atP577,964.



situations. Moreover,RequirementR1of IRO-006-4 furtherappearsto contradict the

FinalBlackoutReport recommendationby allowinga reliability coordinatorto

implementtransmissionloadingrelief proceduresto mitigatenot only potential SOL or

IROL violationsbutalsoactualSOLor IROL violations.28 TheCommissionis

concernedthat Recommendation31of theFinal Blackout Reportand thedirective in

OrderNo. 693, bothof whichstatetheTLR proceduresshould not beusedin situations

involving anactual violationof an IROL, maynotbeclearly addressedin theproposed

Reliability Standard.

49. TheCommissionnotesthatan entity isnotpreventedfrom using theTLR

procedureto avoid a potentialIROL violation beforeaviolation occurs. If, while aTLR

procedureis in progress, anIROL violationoccurs, it is not necessary for theentity to

terminatetheTLR procedure. However, theCommissionbelievesthatit is inappropriate

andineffective to rely on theTLR procedure,evenin conjunction with anothertool, to

addressanactual IROL violation.

28 RequirementR1provides that“[a] reliabili ty Coordinator experiencingapotential or actualSOL or IROL violation within itsReliability CoordinatorAreashall,with its authorityandat its discretion,selectoneor moreproceduresto providetransmissionloading relief. This procedure canbea “l ocal” . . . transmissionloadingrelief procedureor oneof thefollowing Interconnection-wideprocedures….” Sub-requirementR1.1providesthat“[t]he TLR procedurealoneisaninappropriateandineffective tool to mitigatean IROL violation dueto thetime requiredto implementtheprocedure. Other acceptableandmoreeffective proceduresto mitigateactual IROLviolationsinclude: reconfiguration, redispatch,or loadshedding.”



50. Therefore, theCommissiondoesnotapproveor remandIRO-006-4. Rather, the

Commission directstheEROto submita fil ing, within 15 daysof theeffectivedateof

this Final Rule,thatprovidesanexplanationregardingRequirements R1andR1.1 of

IRO-006-4. Specifically, in light of theabovediscussion, theCommission directs the

EROto providean explanationregardingthephrase“[t ]heTLR procedurealoneis an

inappropriateandineffectivetool to mitigateanIROL violation . . .” Further, theERO

shouldexplain whetherRequirementsR1 andR1.1only allow theTLR procedureto

becontinuedwhen alreadydeployedprior to anactual IROL violationor, alternatively,

whetherRequirements R1andR1.1allow useof theTLR procedureasa tool to address

actual violationsafter theyoccur. If thelatter, theEROis directedto explain why this

application is not contrary to bothBlackoutReportRecommendation 31andthe

Commission’sdeterminationin OrderNo. 693. TheERO’s fil ing should includean

explanation of thoseactionsthatareacceptable, andthosethatareunacceptable, pursuant

to RequirementR1 andR1.1.

C. NERC’s December 26, 2007 Filing: Modification to Five “Interchangeand Scheduling” Reliability Standards

51. NERC submittedfor Commissionapprovalproposedmodificationsto five

Reliability Standardsfrom theINT groupof Reliability Standards.

1. INT-001-3 – Interchange Information and INT-004-2 – DynamicInterchange Transaction Modifications

52. TheInterchangeSchedulingandCoordinationor “I NT” groupof Reliability

Standardsaddressinterchangetransactions,whichoccurwhenelectricity is transmitted



from aseller to abuyeracrosstheBulk-Power System. Reliabilit y Standard INT-001

appliesto purchasing-sellingentitiesandbalancingauthorities. Thestatedpurposeof the

Reliability Standard is to “ensurethatInterchangeInformation is submittedto theNERC-

identified reliability analysisservice.” Reliability Standard INT-004is intendedto

“ensureDynamic Transfersareadequately taggedto beable to determinetheir reliability

impacts.”

53. In OrderNo. 693,theCommissionapprovedearlier versionsof theseReliability

Standards, INT-001-2 andINT-004-1.29 Further,whenNERCinitially (in April 2006)

submittedthesetwo Reliability Standardsfor Commissionapproval,NERCalsoasked

theCommissionto approvea “regionaldifference” thatwould exempt WECCfrom

requirementsrelatedto taggingdynamicschedulesandinadvertentpaybackprovisionsof

INT-001-2 andINT-004-1. TheCommission, in OrderNo. 693,statedthatit did not

havesufficient informationto address theERO’s proposedregional differenceand

directedtheEROto submita filin g eitherwithdrawing theregional differenceor

providingadditionalinformationneededfor theCommission to makeadeterminationon

the matter.30 Theeffectof NERC’s December26,2007 fi ling is to withdrawtheregional

differencewith respect to WECC.

29 OrderNo. 693,FERCStats.& Regs.¶ 31,242atP821,843. In addition, theCommission directedthattheERO develop modificationsto INT-001-2 andINT-004-1 that addresstheCommission’sconcerns.

30 Id. P825.



54. In itsDecember26,2007filing, NERC stated that, by rescinding thee-tagging

waivers,NERCmaintainsuniformity andmakesnostructural changesto the

requirementsin thecurrentCommission-approvedversion of theReliability Standards.

55. In theNOPR, theCommissionproposed to approveINT-001-3 and INT-004-2.

a. Comments

56. NERC andtheIESOsupporttheCommissionsproposalto approvethese

Reliability Standards.

b. Commission Determination

57. Pursuantto section215(d)of theFPA, theCommission approvesReliability

StandardsINT-001-3 andINT-004-2 as mandatory andenforceable.

2. INT-005-2 – Interchange Authority Distributes Arranged Interchange,INT-006-2 – Response to Interchange Authority, and INT-008-2 –Interchange Authority Distributes Status

58. Reliability StandardINT-005-1 appliesto theinterchangeauthority. Thestated

purposeof proposedReliability StandardINT-005-1 is to “ensurethatthe

implementation of InterchangebetweenSourceandSink BalancingAuthorities is

distributedby anInterchangeAuthority such thatInterchangeinformation isavailable for

reliabili ty assessments.”

59. Reliability StandardINT-006-1 appliesto balancingauthoritiesand transmission

serviceproviders. Thestatedpurposeof theReliability Standard is to “ensurethateach

ArrangedInterchangeis checkedfor reliability before it is implemented.”



60. Reliability StandardINT-008-1 appliesto theinterchangeauthority. Thestated

purposeof theReliability Standardis to “ensurethattheimplementation of Interchange

betweenSourceand SinkBalancingAuthorities is coordinatedby an Interchange

Authority.” This meansthatit is aninterchangeauthorities’ responsibility to overseeand

coordinate theinterchangefrom onebalancing authority to another.

61. In itsDecember26,2007filing, NERC addressed a reliability needidentified by

WECC in its urgentactionrequest. Specifically, RequirementR1.4 of INT-007-1

requiresthateach balancingauthorityand transmissionserviceproviderprovide

confirmationto theinterchangeauthority that it hasapprovedthetransactionsfor

implementation. NERCstated that for WECCthetimeframeallottedfor thisassessment

is five minutesin theoriginal version of theCommission-approvedReliability Standards.

62. Reliability Standardsfor INT-005-2, INT-006-2, andINT-008-2 increase the

timeframe for applicableWECCentitiesto performthereliabili ty assessmentfrom five to

tenminutes for nexthourinterchangetagssubmittedin thefirst thirty minutesof thehour

before. Accordingto NERC,this modificationis needed because themajority of next-

hour tagsin WECCaresubmitted between xx:00andxx:30. Theexisting five minute

assessmentwindow makesit nearlyimpossiblefor balancingauthoritiesandtransmission

serviceprovidersto review eachtagbefore thefiveminuteassessment timeexpires.

According to NERC, whenthetimeexpires, the tagsaredeniedandmustberesubmitted.

63. In itsDecember26,2007filing, NERCstated thatWECC hasexperienced

numerousinstancesof transactions beingdeniedbecauseoneor more applicable



reliabili ty entitiesdid notactivelyapprovethetag. In NERC’sview, thecurrentstructure

causesfrustration andinefficienciesfor entitiesinvolvedin this process, asrequestorsare

requiredto re-create tagsthataredenied. Further,NERCstated thatthere is no reliability

basisfor a five minuteassessmentperiodfor tagssubmittedat leastthirty minutesahead

of theramp-in period.

64. NERC noted that,prior to January1, 2007, whenthenew INT group of Reliability

StandardswasimplementedWECC hada ten-minute reliabili ty assessmentperiod for

next-hourtags. NERCstatesthattheurgentaction requestrestoresassessmenttimes

backto tenminutes.

65. In theNOPR,theCommissionproposed to approveINT-005-2, INT-006-2, and

INT-008-2.

a. Comments

66. NERC andIESOsupport theCommissionsproposalto approvethese Reliability

Standards.


67. Pursuantto section215(d)of theFPA, theCommission approvesReliability

StandardsINT-005-2, INT-006-2, and INT-008-2 asmandatory andenforceable.31

31 TheCommissionnotesthatNERC’s compliancewith OrderNo. 693, withrespectto Reliability StandardINT-006-1, is ongoing. SeeOrderNo. 693,FERCStats.& Regs.¶ 31,242atP 866.



III. Information Collection Statement

68. TheOffice of ManagementandBudget(OMB) regulationsrequire thatOMB

approvecertainreportingandrecordkeeping (collectionsof information) imposedby an

agency.32 Theinformation containedhereis alsosubjectto review undersection3507(d)

of thePaperwork ReductionAct of 1995.33 As statedabove,theCommission previously

approved,in OrderNo. 693,eachof theReliabili ty Standardsthatarethesubjectof the

currentrulemaking. In theNOPR,theCommissionexplainedthatthemodificationsto

theReliability Standardsareminorandthe interpretationsrelateto existing Reliability

Standards;therefore, theydonotadd to or increaseentities’ reporting burden. Thus,in

theNOPR,theCommissionstatedthatthe modified Reliability Standardsand

interpretationsof Reliability Standardsdo not materially affecttheburdenestimates

relating to theearlier versionof theReliabil ity Standardspresentedin OrderNo. 693.34

69. In responseto theNOPR, theCommissionreceivednocommentsconcerning its

estimatefor theburdenandcostsandthereforeusesthesameestimatehere.

32 5 CFR1320.11.

33 44U.S.C.3507(d).

34 SeeOrderNo. 693,FERCStats.& Regs.¶ 31,242atP1905-07. TheNOPR,FERCStats.& Regs.¶ 32,632at P76-78, providedadetailedexplanationwhy eachmodification and interpretationhasanegligible, if any, affecton thereporting burden.



Title: Modificationof InterchangeandTransmissionLoadingRelief Reliability

Standards;andElectricReliability Organization Interpretation of SpecificRequirements

of FourReliability Standards.

Action: ProposedCollection.

OMB ControlNo.: 1902-0244.

Respondents: Businessesor otherfor-profit institutions;not-for-profit institutions.

Frequencyof Responses: On Occasion.

Necessity of theInformation: ThisFinal Ruleapproves five modifiedReliability

Standardsthatpertainto interchangescheduling andcoordination. It directsNERCto

makea fi ling with theCommission regarding onemodifiedReliabili ty Standardthat

pertainsto transmissionloadingrelief procedures. In addition, theFinal Ruleapproves

interpretationsof five specificrequirementsof Commission-approvedReliabili ty

Standards. TheFinal Rule finds theReliability Standardsandinterpretationsjust,

reasonable,notundulydiscriminatory or preferential, andin thepublic interest.

70. Interestedpersons mayobtaininformation on thereporting requirementsby

contacting: Federal EnergyRegulatoryCommission,Attn: MichaelMi ller,Office of the

ExecutiveDirector,888First Street,N.E. Washington,D.C.20426,Tel: (202)502-8415,

Fax: (202)273-0873,E-mail: [email protected], or by contacting:

Office of InformationandRegulatoryAffairs,Attn: DeskOfficer for theFederalEnergy

Regulatory Commission(Re:OMB Control No. 1902-0244),Washington,D.C. 20503,

Tel: (202)395-4650,Fax: (202)395-7285,E-mail: <[email protected]>.



IV. Environmental Analysis

71. TheCommissionis requiredto prepareanEnvironmental Assessmentor an

EnvironmentalImpactStatementfor anyaction thatmayhaveasignificantadverseeffect

on thehumanenvironment.35 TheCommissionhascategorically excludedcertain actions

from this requirement asnothaving asignificanteffecton thehumanenvironment.

Includedin theexclusionarerulesthatareclarifying, corrective, or proceduralor thatdo

not substantiallychangetheeffectof theregulationsbeingamended.36 Theactions

proposedherein fall within this categorical exclusion in theCommission’s regulations.

V. Regulatory Flexibility Act

72. TheRegulatory Flexibility Act of 1980(RFA)37 generally requiresa description

andanalysisof final rules thatwill havesignificanteconomic impactonasubstantial

numberof small entities. TheRFA mandatesconsideration of regulatoryalternativesthat

accomplishthestatedobjectivesof aproposedruleandthatminimize anysignificant

economicimpacton asubstantial numberof smallentities. TheSmall Business

Administration’s Officeof SizeStandardsdevelopsthenumerical definition of asmall

business.(See13 CFR121.201.) Forelectric utilities,a firm is small if, including its

affiliates, it is primarily engagedin thetransmission,generationand/or distribution of

35 RegulationsImplementing theNationalEnvironmental Policy Act of 1969,OrderNo. 486,FERCStats.& Regs. ¶ 30,783(1987).

36 18CFR380.4(a)(2)(ii).

37 5 U.S.C.601-12.



electric energyfor saleandits total electric outputfor thepreceding twelvemonthsdid

notexceedfour million megawatthours. TheRFA is not implicatedby thisFinalRule

becausetheminor modificationsandinterpretationsdiscussedhereinwill nothavea

significanteconomicimpact ona substantial numberof smallentities.

VI. Document Availability

73. In additionto publishing thefull textof thisdocumentin theFederalRegister, the

Commission providesall interestedpersonsanopportunity to view and/orprint the

contentsof thisdocumentvia theInternetthroughFERC’sHomePage

(http://www.ferc.gov) andin FERC’sPublicReferenceRoomduring normalbusiness

hours (8:30a.m. to 5:00p.m.Eastern time)at 888First Street, N.E.,Room2A,

WashingtonD.C. 20426.

74. FromFERC’sHomePageon theInternet, this information is availableon

eLibrary. Thefull text of thisdocumentis availableoneLibrary in PDF andMicrosoft

Word formatfor viewing,printing,and/or downloading. To accessthisdocumentin

eLibrary,typethedocketnumber excluding the last threedigitsof thisdocumentin the

docketnumberfield.

75. Userassistanceisavailablefor eLibraryand theFERC’swebsite duringnormal

businesshours fromFERC OnlineSupport at (202) 502-6652(toll freeat1-866-208-

3676) or e-mail at [email protected], or thePublicReferenceRoomat (202)

502-8371,TTY (202)502-8659. E-mail thePublic ReferenceRoomat

[email protected].



VII. Effective Date and Congressional Notification

76. Theseregulationsareeffective[insert date30 daysfrompublicationin

FEDERAL REGISTER]. TheCommissionhasdetermined, with theconcurrenceof the

Administrator of theOffice of InformationandRegulatory Affairs of OMB, thatthis rule

is not a “majorrule” asdefinedin section 351of theSmallBusinessRegulatory

Enforcement FairnessAct of 1996.

List of subjects in 18CFRPart 40

Electricpower,Electricutilities, Reportingandrecordkeeping requirements.

By theCommission.

( SE A L )

Nathaniel J.Davis, Sr.,Deputy Secretary.


Document Content(s)

19442742.DOC..........................................................1-37


126 FERC ¶ 61,252UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

18 CFR Part 40

[Docket Nos. RM08-7-000 and RM08-7-001; Order No. 713-A]

Modification of Interchange and Transmission Loading Relief Reliability Standards; andElectric Reliability Organization Interpretation of Specific Requirements of Four

Reliability Standards

(Issued March 19, 2009)

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final Rule

SUMMARY: Pursuant to section 215 of the Federal Power Act (FPA), the Federal

Energy Regulatory Commission (Commission) approves Reliability Standard IRO-006-4,

submitted to the Commission for approval by the North American Electric Reliability

Corporation (NERC). The Reliability Standard addresses transmission loading relief

requirements, which provide a mechanism to manage and, if necessary, curtail

interchange transactions. In addition, pursuant to section 215(d)(5) of the FPA, the

Commission directs NERC to develop modifications to Reliability Standard IRO-006-4

to address specific Commission concerns.

EFFECTIVE DATE: This rule will become effective [insert date that is 30 days after

publication in the FEDERAL REGISTER]


Docket No. RM08-7-000 ii

FOR FURTHER INFORMATION CONTACT:

Patrick Harwood (Technical Information)Office of Electric ReliabilityFederal Energy Regulatory Commission888 First Street, NEWashington, DC 20426(202) [email protected]

Christopher Daignault (Legal Information)Office of the General CounselFederal Energy Regulatory Commission888 First Street, NEWashington, DC 20426(202) [email protected]

SUPPLEMENTARY INFORMATION:


UNITED STATES OF AMERICAFEDERAL ENERGY REGULATORY COMMISSION

Modification of Interchange and Transmission LoadingRelief Reliability Standards; and Electric ReliabilityOrganization Interpretation of Specific Requirements ofFour Reliability Standards

Docket Nos. RM08-7-000 andRM08-7-001

ORDER NO. 713-A

TABLE OF CONTENTS

Paragraph Numbers

I. Background .................................................................................................................... 2.A. Procedural Background ............................................................................................ 2.B. Reliability Standard IRO-006-4 ............................................................................... 6.

II. Discussion ................................................................................................................... 11.A. Approval of Reliability Standard IRO-006-4......................................................... 11.

1. Transfer of Business-Related Requirements to NAESB .................................... 15.2. Improvements to the TLR Procedure ................................................................. 18.

B. Requirement R1...................................................................................................... 22.1. Use of TLR Procedure in Conjunction with Other Procedures to Mitigate anIROL Violation........................................................................................................ 23.2. Use of TLR Procedure Alone to Mitigate an IROL Violation ........................... 37.3. Use of Demand-Side Management to Mitigate IROL Violations ...................... 41.

C. Violation Risk Factors............................................................................................ 47.1. Comments ........................................................................................................... 48.2. Commission Determination on Violation Risk Factors...................................... 60.3. Commission Determination on Violation Severity Levels................................. 71.

III. Information Collection Statement ............................................................................. 74.

IV. Environmental Analysis ............................................................................................ 77.

V. Regulatory Flexibility Act .......................................................................................... 78.

VI. Document Availability .............................................................................................. 79.

VII. Effective Date and Congressional Notification ....................................................... 82.


UNITED STATES OF AMERICAFEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Jon Wellinghoff, Acting Chairman;Suedeen G. Kelly, Marc Spitzer,and Philip D. Moeller.

Modification of Interchange and Transmission LoadingRelief Reliability Standards; and Electric ReliabilityOrganization Interpretation of Specific Requirements ofFour Reliability Standards

Docket Nos. RM08-7-000andRM08-7-001

ORDER NO. 713-A

FINAL RULE

(Issued March 19, 2009)

1. Pursuant to section 215 of the Federal Power Act (FPA)1 the Commission

approves Reliability Standard IRO-006-4, submitted to the Commission for approval by

the North American Electric Reliability Corporation (NERC). The Reliability Standard

addresses transmission loading relief requirements, which provide a mechanism to

manage and, if necessary, curtail interchange transactions. In addition, pursuant to

section 215(d)(5) of the FPA, the Commission directs NERC to develop modifications to

Reliability Standard IRO-006-4 to address specific concerns identified by the

Commission.

1 16 U.S.C. 824o (2006).


Docket Nos. RM08-7-000 and RM08-7-001 2

I. Background

A. Procedural Background

2. On December 21, 2007, NERC, the Commission-certified electric reliability

organization (ERO), submitted for Commission approval modifications to Reliability

Standard IRO-006-4 (Reliability Coordination – Transmission Loading Relief), known as

the transmission loading relief or “TLR” procedure.2

3. On April 21, 2008, as supplemented on May 16, 2008, the Commission issued a

Notice of Proposed Rulemaking (NOPR) that proposed to approve three NERC filings,

including Reliability Standard IRO-006-4.3 In response, nine interested persons filed

comments, six of which address the TLR procedure at issue here.4 (The Commission

consolidated three ERO submissions in the RM08-7-000 rulemaking proceeding. This

Supplemental Final Rule only addresses the ERO’s December 21, 2007 filing pertaining

2 Reliability Standard IRO-006-4 is not codified in the Commission’s regulationsand is not attached to this Supplemental Final Rule. It is, however, available on theCommission’s eLibrary document retrieval system in Docket No. RM08-7-000 and alsois available on the ERO’s website, http://www.nerc.com.

3 Modification of Interchange and Transmission Loading Relief ReliabilityStandards; and Electric Reliability Organization Interpretation of Specific Requirementsof Four Reliability Standards, Notice of Proposed Rulemaking, 73 FR 22856 (Apr. 28,2008), FERC Stats. & Regs. ¶ 32,632, at P 48 (2008) (NOPR), Supplemental Notice ofProposed Rulemaking, 73 FR 30326 (May 27, 2008), FERC Stats. & Regs. ¶ 32,635(2008) (Supplemental NOPR).

4 Appendix A identifies the NOPR commenters.



to the TLR Reliability Standard. The Commission addressed the other two ERO filings

in Order No. 713, i.e., the Final Rule in this proceeding.)

4. On July 21, 2008, the Commission issued a Final Rule in this proceeding, which

approved five Reliability Standards and approved NERC’s interpretation of other

Reliability Standards. 5 The Commission, however, did not make a determination in the

Final Rule regarding Reliability Standard IRO-006-4 and, instead, directed NERC to

submit a filing explaining one aspect of the TLR procedure.

5. On September 11, 2008, NERC submitted a filing as directed in the Final Rule.

Notice of NERC’s September 11, 2008 filing was published in the Federal Register,

73 FR 75,429. Three interested persons submitted comments.6

B. Reliability Standard IRO-006-4

6. Reliability Standard IRO-006-4 applies to balancing authorities, reliability

coordinators, and transmission operators. Reliability Standard IRO-006-4 modifies

Reliability Standard IRO-006-3, which the Commission approved in Order No. 693.7 In

5 Modification of Interchange and Transmission Loading Relief ReliabilityStandards; and Electric Reliability Organization Interpretation of Specific Requirementsof Four Reliability Standards, Order No. 713, 73 FR 43613 (July 28, 2008), 124 FERC¶ 61,071 (2008) (Order No. 713 or Final Rule).

6 Appendix B identifies the commenters on NERC’s September 11, 2008 filing. Inaddition, NERC filed reply comments.

7 Mandatory Reliability Standards for the Bulk-Power System, Order No. 693,FERC Stats. & Regs. ¶ 31,242, order on reh’g, Order No. 693-A, 120 FERC ¶ 61,053(2007).



its December 2007 filing, NERC explained that it modified the TLR procedure to

“extract” commercial requirements and business practices.8 Further, the modified

Reliability Standard includes changes directed by the Commission in Order No. 693

related to the appropriateness of using the TLR procedure to mitigate a violation of an

interconnection reliability operating limit (IROL).9

7. Reliability Standard IRO-006-4 contains five requirements. Requirement R1

obligates a reliability coordinator experiencing a potential or actual system operating

limit (SOL) or IROL violation within its reliability coordinator area to select one or more

procedures to mitigate potential or actual transmission overloads. The requirement also

identifies the regional TLR procedures in WECC and ERCOT. Requirement R1 includes

a warning that the TLR procedure alone is an inappropriate and ineffective tool to

mitigate an actual IROL violation and provides alternatives.

8 The commercial requirements were transferred to a North American EnergyStandards Board (NAESB) business practices document. The Commission approved theNAESB TLR standard, WEQ-008, to coincide with the effective date of ReliabilityStandard IRO-006-4. See Standards for Business Practices and CommunicationProtocols for Public Utilities, Order No. 676-C, 73 FR 43848 (July 29, 2008), FERCStats. & Regs. ¶ 31,274, at P 7 n.11, P 9, P 80 (2008); see also Order No. 713, 124 FERC¶ 61,071 at P 8.

9 An IROL is a system operating limit that, if violated, could lead to instability,uncontrolled separation, or cascading outages that adversely impact the reliability of theBulk-Power System.



8. Requirement R2 mandates that the reliability coordinator only use local TLR or

congestion management procedures to which the transmission operator experiencing the

potential or actual SOL or IROL is a party.

9. Requirement R3 establishes that a reliability coordinator with a TLR obligation

from an interconnection-wide procedure follow the curtailments as directed by the

interconnection-wide procedure. It also requires that a reliability coordinator desiring to

use a local procedure as a substitute for curtailments as directed by the interconnection-

wide procedure must obtain prior approval from the ERO.

10. Requirement R4 mandates that each reliability coordinator comply with

interconnection-wide procedures, once they are implemented, to curtail transactions that

cross interconnection boundaries. Requirement R5 directs balancing authorities and

reliability coordinators to comply with applicable interchange-related Reliability

Standards during the implementation of TLR procedures.

II. Discussion

A. Approval of Reliability Standard IRO-006-4

11. In the NOPR, the Commission proposed to approve IRO-006-4 as just, reasonable,

not unduly discriminatory or preferential, and in the public interest.10

10 NOPR, FERC Stats. & Regs. ¶ 32,632 at P 47.



12. NERC and IESO support approval of the Reliability Standard. Lafayette and

LEPA state that they support the Commission’s effort to reduce the use of TLRs; they

support adoption of the Reliability Standards as proposed by the Commission.

13. Pursuant to section 215(d) of the FPA, the Commission approves Reliability

Standard IRO-006-4 as mandatory and enforceable. The ERO’s proposal implements the

Commission’s directives in Order No. 693 to include a warning that the TLR procedure is

an inappropriate and ineffective tool to mitigate actual IROL violations and identify

available alternatives to mitigate an IROL violation.11 Further, as discussed below, the

Commission believes that the separation of business practices from the Reliability

Standards will not compromise Bulk-Power System reliability. Accordingly, the

Commission approves IRO-006-4 as just, reasonable, not unduly discriminatory or

preferential, and in the public interest, as discussed below.

14. As a separate matter, pursuant to section 215(d)(5) of the FPA, the Commission

directs the ERO to develop, pursuant to its Reliability Standards development procedure,

modifications to IRO-006-4 to address the Commission’s specific concerns, as discussed

below. Further, the Commission approves the proposed violation risk factors and

violation severity levels and directs the ERO to submit a filing within 60 days of the

11 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 577.



effective date of this Supplemental Final Rule revising specified violation risk factors and

violation severity levels.

1. Transfer of Business-Related Requirements to NAESB

15. The Commission, in the NOPR, sought comments on whether the removal and

transfer to NAESB of the business-related issues formerly contained in Reliability

Standard IRO-006-3 could compromise Bulk-Power System reliability.12

a. Comments

16. NERC states that it has coordinated with NAESB and believes there is no

compromise in reliability as a result of the removal and transfer to NAESB of the

business-related issues formerly contained in the earlier standard, IRO-006-3. NERC

notes that there are minor differences in terminology and language between the NERC

and NAESB documents. It states that, although these differences may be confusing to

industry, they do not affect the ability to successfully implement the standards as written.

Further, NERC indicates that it is working with NAESB to develop more in-depth

coordination procedures to ensure that language is consistent.


17. Based on the ERO’s explanation, we are persuaded that the separation of business

practices from the Reliability Standards will not compromise Bulk-Power System

reliability. However, we are concerned with respect to the ERO’s acknowledgement that




there are differences in terminology and language used between the ERO Reliability

Standard and the NAESB standard that pertain to TLR procedures. The ERO indicates

that it is currently working with NAESB to develop more in-depth coordination

procedures to ensure that language is consistent. Thus, we expect that the ERO, working

with NAESB, will resolve the inconsistencies in terminology between the Reliability

Standard and NAESB standard regarding TLR procedures as their agendas permit; we do

not find a need to direct changes at this time.

2. Improvements to the TLR Procedure

a. Comments

18. Several commenters raise concerns regarding needed improvements to the TLR

procedure. Lafayette and LEPA comment that they have often “suffered” from the

curtailment of firm transmission service pursuant to the TLR procedure and support

efforts to reduce its use. NRG comments that the excessive use of TLRs is reducing

system reliability in some non-organized markets and that the Commission should require

NERC to modify its TLR rules to limit the excessive use of TLRs. NRG states that the

Interchange Distribution Calculator (IDC) is critical to the TLR process,13 since

reliability coordinators rely on the curtailments specified by the IDC. NRG identifies two

13 The IDC is a mechanism used by the reliability coordinators in the EasternInterconnection to calculate the distribution of interchange transactions over specificflowgates. It includes a database of all interchange transactions and a matrix of thedistribution factors for the Eastern Interconnection.



significant problems with the IDC that IRO-006-4 does not address: (1) the generation

and load data relied on by the IDC is static, with no requirement that it be regularly

updated or accurately reflect real-time conditions; and (2) the IDC methodology does not

curtail certain schedules or determine native network load obligations accurately in some

cases, leading to a discriminatory assignment of reliability obligations. NRG urges the

Commission to direct NERC to modify the IDC to base its curtailment decisions on

accurate native load information and to base them consistently on local load and

generation amounts.

19. Further, NRG states that there is a gap in the proposed TLR procedures that allows

certain non-firm transactions to escape curtailment prior to the issuance of a Level 5 TLR

(i.e., curtailment of firm transactions and firm native load). NRG reiterates its concerns

in its comments on NERC’s September 11, 2008 filing in this proceeding.

20. ISO/RTO Council suggests that the Commission clarify that, although TLR should

not be ruled out as a congestion management tool, NERC should address the use of more

sophisticated tools to respond to the impacts that loop flow and the lack of transparency

in non-RTO regions can have on congestion management at the “seams.”


21. The above comments on suggested improvements to the TLR procedure are

beyond the scope of this proceeding, which pertains to the separation of business

practices from the ERO’s TLR procedure and implementation of the Commission’s



directives set forth in Order No. 693.14 We note, however, that the ERO indicated in its

December 21, 2007 filing that it has a three-phase plan to improve the TLR procedures,

and the third phase will consist of “a complete redrafting to incorporate enhancement and

changes beyond the separation of reliability and business practice issues.”15 Therefore,

the phase three proceeding would provide a proper forum for commenters to raise their

concerns. The Commission believes that NRG and other commenters raise valid issues

and urges the commenters to raise—and expects the ERO to consider—these matters in

an appropriate proceeding. We also note that NERC states it is currently updating the

IDC to more accurately determine the impacts of native load and network service.16

B. Requirement R1

22. Requirement R1 of IRO-006-4 provides, in part:

R1. A Reliability Coordinator experiencing a potential or actual SOL orIROL violation within its Reliability Coordinator Area shall, with itsauthority and at its discretion, select one or more procedures to providetransmission loading relief. These procedures can be a “local” (regional,interregional, or sub-regional) transmission loading relief procedure or oneof the following Interconnection-wide procedures:

14 NERC’s comments in reply to NRG, as well as Constellation’s and, in their jointsupplemental pleading, Lafayette and LEPA’s comments relating to the TLR procedureare likewise beyond the scope of this proceeding.

15 NERC December 21, 2007 Filing at 7. Moreover, pursuant to the ERO’s Rulesof Procedure, a commenter can submit a Standard Authorization Request to the ERO topropose revisions to a Reliability Standard.

16 See NERC September 11, 2008 Response at 10.



R1.1 The Interconnection-wide Transmission Loading Relief (TLR)procedure for use in the Eastern Interconnection is provided in Attachment1-IRO-006-4. The TLR procedure alone is an inappropriate and ineffectivetool to mitigate an IROL violation due to the time required to implementthe procedure. Other acceptable and more effective procedures to mitigateactual IROL violations include: reconfiguration, redispatch, or loadshedding.

Below, we address three concerns regarding Requirement R1: (1) use of the TLR

procedure in conjunction with other procedures to mitigate an IROL violation; (2) use of

the TLR procedure to mitigate an actual IROL violation is a violation of the Reliability

Standard; and (3) use of demand-side management as an effective procedure to mitigate

IROL violations.

1. Use of TLR Procedure in Conjunction with Other Procedures toMitigate an IROL Violation

a. Final Rule Discussion

23. In the Final Rule, the Commission did not approve or remand IRO-006-4 but

rather directed the ERO to submit a filing addressing the Commission’s concerns

regarding Requirements R1 and R1.1 of the Reliability Standard.17 Specifically, the Final

Rule explained that, consistent with the Final Blackout Report,18 Order No. 693 directed

17 Order No. 713, 124 FERC ¶ 61,071 at P 46-50.

18 See U.S.-Canada Power System Outage Task Force, Final Report on the August14, 2003 Blackout in the United States and Canada: Causes and Recommendations, at163 (April 2004) (Final Blackout Report), available athttp://www.ferc.gov/industries/electric/indus-act/blackout.asp. Recommendation 31 ofthe report provides that NERC should “[c]larify that the [TLR] process should not beused in situations involving an actual violation of an Operation Security Limit.”



NERC to develop a modification to the TLR procedure that the Commission accepted in

IRO-006-3 that “(1) includes a clear warning that the TLR procedure is an inappropriate

and ineffective tool to mitigate actual IROL violations and (2) identifies in a Requirement

the available alternatives to mitigate an IROL violation other than use of the TLR

procedure.”19

24. In its December 2007 filing, NERC stated that it modified the Reliability Standard

in response to the Order No. 693 directive. In particular, the ERO modified Requirement

R1.1 of IRO-006-4 to provide that “[t]he TLR procedure [for the Eastern

Interconnection] alone is an inappropriate and ineffective tool to mitigate an IROL

violation due to the time required to implement the procedure.” (Emphasis added.)

25. In Order No. 713, the Commission queried whether the language of Requirements

R1 and R1.1 are adequate to satisfy the concern of the Final Blackout Report and Order

No. 693 that the TLR procedure not be used in response to an actual IROL violation. The

Commission explained:

An entity is not prevented from using the TLR procedure to avoid apotential IROL violation before a violation occurs. If, while a TLRprocedure is in progress, an IROL violation occurs, it is not necessary forthe entity to terminate the TLR procedure. However, the Commissionbelieves that it is inappropriate and ineffective to rely on the TLRprocedure, even in conjunction with another tool, to address an actual IROLviolation.[20]

19 See Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 577, 964.

20 Order No. 713, 124 FERC ¶ 61,071 at P 49.



Accordingly, the Commission directed the ERO to explain Requirements R1 and R1.1 of

IRO-006-4 in light of this concern.

b. NERC Responsive Filing

26. NERC responds that the most immediate reliability goal is the mitigation of the

IROL violation. NERC states that there are four acceptable options to respond to an

IROL violation: inter-area redispatch, intra-area redispatch, reconfiguration of the

transmission system, and voluntary or involuntary reductions in load. According to

NERC, Requirement R1.1 of IRO-006-4 identifies these options as “reconfiguration,

redispatch, or load shedding.”

27. Further, NERC believes that taking concurrent action, i.e., using TLR in

conjunction with one of the above operation actions, “can result in positive outcomes.” 21

NERC agrees with the Commission that the use of TLR prior to an actual IROL violation

is an acceptable practice. NERC also agrees that a TLR should not be terminated

following the occurrence of an IROL violation if the TLR procedure was already in

progress. However, NERC points out that it is impossible to decouple the TLR actions of

the previous hour from those of the current hour. According to NERC, the progressive

nature of TLR requires constant management to ensure that reliability and open access

are maintained. NERC maintains that the Commission should endorse a situation where,

21 NERC September 11, 2008 Response at 4.



on a continuing basis, a TLR can be reissued for a constrained facility in order to assist in

providing relief, in addition to the more immediate operator actions taken to alleviate the

actual overload. NERC disagrees that all interchange transactions should be frozen at

current levels while any new transactions are held, because this could result in

aggravation of the IROL violation from an increase in native load and/or parallel flows.

For similar reasons, NERC also believes it is inappropriate to let the curtailments issued

for the current hour expire and not reissue the TLR, because this practice also could

aggravate the IROL violation, as the single-hour established curtailments would expire

and transactions would be reloaded.

28. NERC avers that the intent of the Commission’s directive is that, should an entity

experience an actual IROL violation, that entity should not invoke the TLR process with

the belief that the IROL violation will be mitigated by the TLR within an acceptable

timeframe. NERC contends, however, that any standard that would require a reliability

coordinator to explicitly not use TLR as one of the tools it has in responding to an actual

IROL violation could compromise reliability, open access, or both. NERC states that it is

appropriate for an entity to use the TLR process in response to an actual IROL, provided

such use is a complementary action to other operator actions employed to mitigate the

IROL violation more expeditiously and, as such, invoking TLR is not the only action

taken.



29. NERC provides examples of use of TLR in conjunction with other acceptable

options to provide a more rapid and effective return from emergency conditions. For

example, NERC states that if an entity redispatches generation and invokes a TLR at the

same time in response to an actual IROL violation, that entity may utilize the generation

to respond immediately to mitigate the violation and bring the flow below the IROL, then

reduce the generation once the TLR is able to effectively and more equitably address the

issue.

c. Comments on NERC Responsive Filing

30. Southern agrees with NERC’s explanation regarding the ways in which a

reliability coordinator may use the TLR procedure. Southern believes that the TLR

procedure, when used in conjunction with reconfiguration, redispatch, or load shedding,

is an indispensable means for providing relief for constrained facilities. Southern

comments that any revision to Reliability Standard IRO-006-4 should be developed

through the Reliability Standards development process.

31. ISO/RTO Council comments that it generally agrees with the sequencing of TLR

procedures as explained by NERC. While ISO/RTO Council supports limiting the wide-

scale use of TLR as a congestion management tool, it believes that the Commission’s

interpretation may draw too fine a line in “hard wiring” a particular sequence of the use

of TLRs. It agrees with NERC that “it is impossible to decouple the actions of the



previous hour from those of the current hour,” and urges the Commission to avoid

placing artificial barriers in the sequencing of the use of the TLR procedure.

d. Commission Determination

32. The Commission is satisfied with the ERO’s response. We agree with the ERO

that acceptable immediate actions to mitigate an IROL violation may include one or more

of the following: inter-area redispatch, intra-area redispatch of generation,

reconfiguration of the transmission system, and voluntary or involuntary load reductions.

When an IROL violation occurs, the reliability coordinator should use the above tools

appropriate to the circumstance and duration of the actual IROL violation for mitigation.

33. We understand from its explanation that the ERO agrees that use of the TLR

procedure is not one of the acceptable immediate actions to mitigate an IROL violation.

Rather, use of the TLR procedure is complementary to, and may be used in conjunction

with, the identified tools to mitigate an IROL violation, provided that the action to

implement the TLR procedure does not interfere with or delay an entity taking the

immediate action required to mitigate the IROL violation.22 The Commission

understands this is the intent of the language in Requirement R1.1 that “[t]he TLR

22 The ERO states that “it is appropriate for an entity to use the TLR process inresponse to an actual IROL, provided that it is a complementary action to other operatoractions employed to mitigate the IROL violation more expeditiously and, as such,invoking TLR is not the only action taken.” NERC September 11, 2008 Response at 5(emphasis added).



procedure alone is an inappropriate and ineffective tool to mitigate an IROL violation due

to the time required to implement the procedure.”

34. The Commission reiterates that the use of a TLR is not required to be terminated

following the occurrence of an IROL violation if the TLR procedure was already in

progress prior to exceeding the IROL. Thus, if an IROL is exceeded after a TLR

procedure is in progress, the reliability coordinator does not need to revoke the TLR.

Moreover, in the event that a potential IROL violation progresses to an actual IROL

violation near the top of the hour and a TLR is already in progress, it is acceptable for the

reliability coordinator to reissue the TLR to prevent reloading or exacerbating

interchange schedules, while more immediate actions are taken to relieve the IROL

violation.

35. During an actual IROL violation, the primary concern of the reliability coordinator

should be to mitigate the violation immediately. Because the TLR procedure may take an

extended time to fully implement, it is not acceptable for a reliability coordinator to

invoke the TLR process with the belief that the IROL violation will be mitigated by the

TLR. Therefore, during an actual IROL violation, a reliability coordinator should initiate

more immediate actions to relieve the IROL violation before initiating a TLR and at no

point should implementing a TLR divert operator resources or delay implementation of

more immediate IROL mitigation actions. In accord with this understanding, we find

Requirement R1.1 consistent with the Final Blackout Report and Order No. 693.



36. As discussed above, based on the ERO’s response we believe that our

understanding of Requirement R1.1 comports with that of the ERO. While IRO-006-4,

Requirement R1.1, should be implemented and enforced with the above understanding,

we believe that the term “alone” in the provision could be improved to more precisely

convey that it is a violation of Requirement R1.1 to rely on the TLR procedure when an

entity is in the process of mitigating an IROL violation and the entity has not taken more

immediate and effective means to achieve relief. Accordingly, pursuant to section

215(d)(5) of the FPA, the Commission directs the ERO to develop a modification of

Requirement R1.1 with respect to the term “alone,” consistent with this discussion.

2. Use of TLR Procedure Alone to Mitigate an IROL Violation

37. In the NOPR, the Commission proposed to approve the Reliability Standard based

on the interpretation that using a TLR procedure alone to mitigate an actual IROL

violation is a violation of the Reliability Standard.23

a. Comments

38. ISO/RTO Council objects to the Commission’s proposal to approve the proposed

Reliability Standard IRO-006-4 based on the interpretation that using a TLR alone to

mitigate an IROL violation is a violation of the Reliability Standard. ISO/RTO Council

expresses concern that the ERO has procedures for interpreting Reliability Standards and

those procedures may be eroded through after-the-fact Commission interpretation without




the opportunity for NERC stakeholder review. ISO/RTO Council urges greater deference

to following the Commission-approved NERC process for the interpretation of Reliability

Standards. Should that process prove too time-consuming, ISO/RTO Council suggests

that the Commission revisit the process itself rather than undertaking de facto

amendments to it by interpreting the Reliability Standard in ways not addressed through

the NERC stakeholder process.


39. This issue raised in the NOPR is somewhat overtaken by the further Commission

inquiry in the Final Rule regarding the appropriate tools for mitigating an IROL violation

and our discussion immediately above on this issue. As we state above, IRO-006-4,

Requirement R1.1, should be “implemented and enforced” based on our understanding in

this order of the issue.

40. In any case, we adopt our NOPR proposal and approve Reliability Standard IRO-

006-4 with the understanding that using a TLR procedure to mitigate an actual IROL

violation is a violation of the Requirement R1.1 of the Reliability Standard, as discussed

above. While ISO/RTO Council raises procedural concerns regarding the Commission’s

interpretation, neither ISO/RTO Council nor any other commenter expresses concern

regarding the substance of the Commission’s interpretation. Further, the Commission



previously has determined—or interpreted—when a violation of a Reliability Standard

would occur.24

3. Use of Demand-Side Management to Mitigate IROL Violations

41. In a joint concurrence to the NOPR, then-Commissioner Wellinghoff and

Commissioner Kelly noted that demand-side management is not explicitly included in

Requirement R1.1 of IRO-006-4 among the acceptable tools to mitigate an IROL

violation. The concurrence noted that nothing in the Reliability Standard precludes the

use of demand-side management that can quickly respond to emergencies and discussed

available demand-side management technologies currently used that may be deployed as

readily, if not faster, than involuntary load shedding. The joint concurrence expressed a

preference to expressly include demand-side management among the list of tools to

mitigate IROL violations, set forth in Requirement R1.1.

a. Comments

42. NERC comments that it did not intend the list of tools in Requirement R1.1 for

addressing IROL violations to be an exhaustive list; effective demand-side response

could also be considered.

43. Alcoa comments that demand-side management should be included in the list of

alternatives to the TLR procedure in IRO-006-4. Alcoa claims that its smelters have

24 N. Am. Elec. Reliability Corp., 119 FERC ¶ 61,321, at P 10 (2007) (“Avegetation-related transmission outage would result in a violation of Requirement R1, R2or both.”).



demonstrated an ability to curb demand to assist in TLR efforts and alleviate IROL

violations. In addition, Alcoa claims that in some instances load may be able to respond

to IROL violations more quickly and effectively than generation reserves. According to

Alcoa, flexible loads served at transmission voltages are most effective for immediate

demand response to IROL violations.

44. ISO/RTO Council comments that IRO-006-4 does not preclude reliance on

demand-side management that can respond quickly to emergencies. It believes that the

Reliability Standards should be resource-neutral in their application. ISO/RTO Council

states that, consistent with Order No. 693, so long as a resource can address system

conditions, it should be recognized in the Reliability Standards as a tool upon which the

system operator can rely. ISO/RTO Council also notes initiatives by NERC and NAESB

to develop rules for classifying demand-side management and identifying methods for

measurement and verification.


45. It is clear from the comments of the ERO, Alcoa, and ISO/RTO Council that the

Reliability Standard includes effective demand-side management as a tool to mitigate an

IROL violation pursuant to Requirement R1.1 of IRO-006-4. In its September 11, 2008

filing, the ERO states that there are four acceptable options to respond to an IROL

violation: inter-area redispatch, intra-area redispatch, reconfiguration of the transmission

system, and voluntary or involuntary reductions in load. The ERO further explains that



the reference in Requirement R1.1 to “load shedding” refers to voluntary or involuntary

reductions in load.25 Thus, as clarified by NERC, Requirement R1.1 allows the use of

effective demand-side management as one tool to mitigate an IROL violation. The

Commission will implement and enforce this Reliability Standard as clarified by NERC.

C. Violation Risk Factors

46. In the NOPR, the Commission proposed to direct the ERO to modify the violation

risk factors assigned to Requirements R1 through R4 by raising them to “high.” This

proposal was based on the Commission’s guidelines for evaluating validity of violation

risk factor assignments.26 In particular, the Commission reasoned that a “high” violation

risk factor assignment for Requirements R1 through R4 is consistent with findings of the

Final Blackout Report.27

25 NERC September 11, 2008 Response at 4.

26 The guidelines are: (1) consistency with the conclusions of the BlackoutReport; (2) consistency within a Reliability Standard; (3) consistency among ReliabilityStandards; (4) consistency with NERC’s definition of the violation risk factor level; and(5) treatment of requirements that co-mingle more than one obligation. The Commissionalso explained that this list was not necessarily all-inclusive and that it retains theflexibility to consider additional guidelines in the future. A detailed explanation isprovided in North American Electric Reliability Corp., 120 FERC ¶ 61,145, at P 8-13(2007).

27 Recommendation 31 states, “Clarify that the transmission loading relief (TLR)process should not be used in situations involving an actual violation or an OperationSecurity Limit.” Final Blackout Report at 163.



1. Comments

47. NERC, IESO, and ISO/RTO Council urge the Commission to adopt the violation

risk factors proposed by NERC. NERC contends that the Commission’s reliance on the

violation risk factors for IRO-006-3, Requirements R1 through R4, submitted in 2007 is

not appropriate.28 NERC explains that the violation risk factors submitted in the current

proceeding for IRO-006-4 received significant industry review and scrutiny, which was

not the case with the 2007 submission.

a. Violation Risk Factors for Requirement R1

48. NERC agrees with the Commission that Requirements R1.1 through R1.3 are

explanatory text and that a violation risk factor need not be assigned to each subsection.

However, NERC, ISO/RTO Council, and IESO disagree with the Commission’s proposal

to direct the ERO to raise the violation risk factor from “medium” to “high.”

49. Specifically, NERC and ISO/RTO Council disagree with the Commission’s

statement that a “high” violation risk factor assignment is consistent with the findings of

the Final Blackout Report. According to NERC, the main thrust of Recommendation 31

in the Final Blackout Report (regarding the use of TLR in response to actual violations)

has been addressed in Requirement R1.1 of the Reliability Standard and does not warrant

a “high” violation risk factor designation. ISO/RTO Council contends that the Final

28 See NOPR, FERC Stats. & Regs. ¶ 32,632 at P 51 (noting that thecorresponding requirements in the earlier Commission-approved version of theReliability Standard were assigned a “high” violation risk factor).



Blackout Report does not identify and rank the associated risk of not implementing each

recommendation. ISO/RTO Council claims that the Final Blackout Report

Recommendation 31 simply focuses on reliability coordinators using tools other than

TLRs for a real-time emergency.

50. Further, NERC contends that IRO-006-4, Requirement R1 and its sub-

requirements are procedural in nature, because they focus on how relief is achieved rather

than on whether relief is achieved. NERC recognizes that “the result of an ineffective

application of this requirement could impact the electrical state of the grid.”29 However,

NERC posits that IRO-005-1, Requirement R5 is the principal source of the reliability

coordinator’s obligation to relieve actual or potential IROL violations. For these reasons,

NERC believes Requirement R1 merits a “medium” violation risk factor.

51. IESO agrees with NERC’s assessment that Requirement R1 is administrative in

nature. IESO states that Requirement R1 provides the initiating reliability coordinator

options from which to choose to relieve transmission constraints, and it becomes a

reliability requirement only when a reliability coordinator chooses an interconnection-

wide procedure as one of the means to relieve transmission constraints. IESO explains

that if a reliability coordinator chooses other control actions but not an interconnection-

wide TLR procedure to prevent or mitigate an IROL violation, this Reliability Standard

29 NERC Comments at 19. Unless otherwise indicated, citations to parties’comments refer to comments filed after the NOPR, prior to the Final Rule.



will not apply, and the reliability coordinator will not be subject to the requirements in

the standard. Further, IESO contends that if a reliability coordinator chooses to apply an

interconnection-wide procedure and the requirements stipulated therein are not complied

with, there is a potential risk on the control and operation of the system, because non-

compliance with the TLR procedure may affect other actions that are also being applied

to prevent or mitigate an IROL violation.

52. IESO and ISO/RTO Council disagree with the Commission’s statement that, if the

reliability coordinator chooses an unapproved and ineffective procedure for relief or fails

to choose a procedure entirely, potential or actual IROL violations will not be mitigated

as intended by the reliability coordinator.30 According to IESO and ISO/RTO Council,

with or without the interconnection-wide relief procedure, reliability coordinators and

transmission operators are required by other Reliability Standards such as TOP-002,

TOP-004, and IRO-005 to apply local control actions and procedures to prevent and

mitigate SOL and IROL violations.

53. ISO/RTO Council also favors a “medium” violation risk factor assignment for

Requirement R1, stating that interconnection-wide procedures are only one tool in the

toolbox to restore system integrity.

30 See NOPR, FERC Stats. & Regs. ¶ 32,632 at P 52.



b. Violation Risk Factors for Requirement R2

54. NERC does not believe that a reliability coordinator could successfully implement

a local procedure to which the particular transmission operator is not a party. In any

event, NERC does not believe that the implementation of such a procedure would in itself

create a “high” reliability risk. NERC states that if the reliability coordinator were able to

achieve the relief, then it would be considered as having the lesser infraction of using the

wrong tools to achieve the correct results. Further, it states that if such a procedure did

not provide the required relief, the reliability coordinator would be in violation of IRO-

005-1, Requirement R5. NERC claims this requirement is focused on “how” the relief is

provided, not “whether” the relief is provided. In addition, NERC states that the use of a

local procedure is implemented at the discretion of the reliability coordinator and is not

obligatory. Accordingly, NERC believes that a violation risk factor of “lower” is

appropriate.

55. IESO argues the intent of Requirement R2 is to ensure that a reliability

coordinator who initiates actions to relieve transmission constraints in a transmission

operator’s area applies the actions that are either totally local to the transmission

operator’s area or which have been developed by the transmission operator jointly with

other transmission operators. IESO states that choosing which procedures to relieve

transmission constraints is an administrative requirement since the reliability coordinator,

having the authority to ensure wide area reliability, may apply any procedures that it



deems necessary to relieve transmission constraints. IESO contends that in the event the

reliability coordinator applies a relief procedure to which the constrained transmission

operator is not a party, it should not be a presumption that prevention or mitigation of an

IROL violation will not be achieved since the reliability coordinator is obligated to

ensure operating reliability through compliance with IRO-005-1. For these reasons,

IESO believes that Requirement R2 is administrative and deserves a “lower” violation

risk factor.

56. IESO disagrees with the Commission assessment that “[v]iolation risk factors

should not be assigned differently for requirements in separate Reliability Standards

based on compliance with another Reliability Standard,” on the basis that “[t]wo

requirements either achieve separate reliability goals and, therefore, violation of them

represents independent risks, or two requirements share the same reliability goal.”31

IESO states that, while the IRO-005-1 requirements and the TLR requirements share the

same reliability goal, the latter is in fact subordinate to the former. Thus, IESO maintains

that there should not be two simultaneous “high” risk penalties assessed for a reliability

coordinator for failing to comply with the TLR procedure of Requirements R1 or R2 and

for failing to prevent or mitigate an IROL violation as required in IRO-005-1.

31 IESO Comments at 8 (quoting NOPR, FERC Stats. & Regs. ¶ 32,632 at P 53).



c. Violation Risk Factors for Requirement R3

57. NERC maintains that Requirement R3 is focused on the procedural aspects of the

Reliability Standard, i.e., how the relief is provided rather than whether the relief was

provided. NERC argues that if the entity is able to achieve the relief through other means

that were not pre-approved, then it would have committed an administration violation of

using the wrong tools to achieve the correct results. According to NERC, if such a

procedure did not provide the required relief, the reliability coordinator would be in

violation of IRO-005-1, Requirement R5. For reasons similar to those provided for

Requirement R2, IESO agrees with NERC that Requirement R3 is administrative and

deserves a “lower” violation risk factor.

d. Violation Risk Factors for Requirement R4

58. NERC claims that a violation of Requirement R4 is “a specific kind of violation of

the INT family of Reliability Standards that is being caused by a reliability coordinator’s

inaction, resulting in an imbalance in one or both of the interconnections involved.”32

NERC comments that Requirement R4 complements the INT group of Reliability

Standards in the same fashion as Requirement R5, which the Commission supported with

a violation risk factor of “medium.” IESO concurs with NERC’s assignment of a

“medium” violation risk factor to Requirement R4. IESO reasons that complying with

the provisions of the interconnection-wide procedure of the initiating reliability

32 NERC Comments at 21-22.



coordinator is no more stringent than complying with the request for relief based on the

TLR procedure within the same interconnection, the latter being the requirement in R1.

2. Commission Determination on Violation Risk Factors

59. For the reasons stated in the NOPR and as discussed below, the Commission

directs the ERO to modify the violation risk factors of Requirements R1 through R4 of

IRO-006-4 to “high.”

60. The Commission disagrees with NERC and others and finds that it is appropriate

to use the Final Blackout Report as a basis for setting violation risk factors of the

proposed Reliability Standard at “high” for several reasons. The Final Blackout Report is

the result of the U.S-Canada Task Force’s investigation of the August 14, 2003 blackout

where the Task Force identified contributing factors and causes that put the Bulk-Power

System at risk for that event. Specifically, the Final Blackout Report identified an

attempt to use the TLR process to address transmission power flows without recognizing

that the imposition of a TLR procedure would not solve the problem as one contributing

cause for the initiation of the blackout of August 2003. Based on its findings, the Task

Force developed recommendations to reduce the possibility of future outages and to

reduce the scope of future blackouts that may nonetheless occur.33 Thus, the Task Force

developed Recommendation No. 31 to prevent the initiation of a TLR procedure during

33 Final Blackout Report at 20.



an actual violation of an SOL.34 Since the Final Blackout Report was developed to

document the August 14, 2003 blackout’s contributing factors and causes, which include

specific violations of then voluntary reliability policies, guidelines, and standards, the

Commission believes it is appropriate to use the findings of the Final Blackout Report as

one of the guidelines for the determination of a requirement’s violation risk factor.

Specifically, the Commission believes the findings of the Final Blackout Report are

particularly relevant in the determination of violation risk factors of then-voluntary

reliability policies, guidelines, and standards identified as causes and factors of the

August 14, 2003 blackout that the ERO proposes as mandatory Reliability Standards,

such as IRO-006-4. The Commission also disagrees for the same reasons with

commenters that argue the Final Blackout Report does not identify and rank the

associated risk of not implementing each recommendation.

61. While we agree that Requirement R.1.1 discourages the use of a TLR to mitigate a

real-time IROL violation, Requirement R1.1, is merely explanatory text. It is

Requirement R1 that establishes that the reliability coordinator shall choose one or more

of the procedures, listed as sub-requirements, to provide the appropriate transmission

relief. The selection of a procedure to provide relief to address a potential or actual SOL

or IROL violation is directly relevant to Final Blackout Report Recommendation No. 31.

34 Id. at 163.



If an inappropriate procedure is selected in an attempt to mitigate an IROL, the Bulk-

Power System is vulnerable to cascading outages, as was the case on August 14, 2003.

62. The Commission is not persuaded by NERC’s argument relative to “using the

wrong tools to achieve the correct results” in the assignment of a requirement’s violation

risk factor. Contrary to this argument, the Commission has recognized that there may be

some Reliability Standards where the means, or the “how,” is inextricably linked to the

effectiveness of the Reliability Standard.35 We find that this is the case here. The

Commission has explained that the inclusion of implementation practices within

requirements of such a standard is to reduce uncertainty and further objectives that foster

reliability which, if violated, would pose increased reliability risk to the Bulk-Power

System.36

63. Similarly, NERC’s argument that, if the reliability coordinator were able to

achieve the relief desired without complying with Requirement R1, it would be

considered as having the lesser infraction of using the wrong tools to achieve the correct

results is also flawed. The purpose of the violation risk factor is to accurately portray the

35 Rules Concerning Certification of the Electric Reliability Organization; andProcedures for the Establishment, Approval, and Enforcement of Electric ReliabilityStandards, Order No. 672, FERC Stats. & Regs. ¶ 31,204, at P 260; see also id., OrderNo. 672-A, FERC Stats. & Regs. ¶ 31,212 (2006).

36 N. Am. Elec. Reliability Corp., 121 FERC ¶ 61,179, at P 15 (2007).



risk a violation poses to the Bulk-Power System,37 notwithstanding a violator’s avoidance

of reliability problems in a particular case by using an unreliable operation. This

Commission determination is relevant to arguments that a “high” violation risk factor is

not appropriate because the subject requirement overlaps other requirements, duplicates

other requirements, or could be implemented by alternative means. The Commission has

previously determined that NERC should address those issues through the Reliability

Standard development process.38

64. The Commission also disagrees with the characterization of Requirements R1, R2,

and R3 as procedural choices without reliability-related consequences. For example,

failure to implement Requirement R1, i.e., failure to select one or more procedures to

provide transmission relief, is not just a procedural or administrative choice; it is a

decision that has the potential to place the Bulk-Power System at risk of cascading

outages. Although commenters argue that a violation of Requirement R2 is essentially

administrative in nature and that the prevention or mitigation of the potential or actual

SOL or IROL may be achieved through compliance with another Reliability Standard,

which would justify a “lower” violation risk factor, the Commission disagrees.

Requirements R1 through R4 require that a reliability coordinator choose and follow the

37 Id. P 16.

38 Id. P 39.



appropriate procedure to provide relief. If the reliability coordinator chooses an

unapproved and/or ineffective procedure for relief or fails to choose a procedure entirely,

potential or actual IROL violations will not be mitigated as intended by the reliability

coordinator. Therefore, the Commission finds that violation of Requirements R1 through

R4 present a high reliability risk to Bulk-Power System. Assigning a “high” violation

risk factor to Requirements R1 through R4 is consistent with the Final Blackout Report.

65. A violation risk factor represents the reliability risk a violation of that requirement

presents to the Bulk-Power System. Violation risk factors should not be assigned

differently for requirements in separate Reliability Standards based on compliance with

another standard. This assessed reliability risk is independent and not contingent upon

compliance with other requirements of Reliability Standards. While the Commission

recognizes the complementary nature of proposed Reliability Standard IRO-006-4,

Requirement R1 and Reliability Standard IRO-005-1, Requirement R5, the fact that

requirements may share the same reliability objective as another requirement does not

justify lowering one or more of the requirements’ violation risk factors. In fact, the

Commission expects the assignment of violation risk factors corresponding to

requirements that address similar reliability goals in different Reliability Standards to be



treated comparably.39 The Commission notes that Reliability Standard IRO-005-1,

Requirement R5, is assigned a “high” violation risk factor.

66. Further, the argument that a “lower” violation risk factor assigned to Requirement

R1 is appropriate since Requirement R1 is administrative in nature (because it provides

the initiating reliability coordinator with options to choose among available procedures

and only becomes a reliability requirement when a reliability coordinator chooses an

interconnection-wide procedure) is flawed. First, the fact that a requirement provides

“options” does not automatically make that requirement administrative. It is the potential

reliability risks the failure to take options mandated by the requirement presents to the

Bulk-Power System that determines that requirement’s violation risk factor. Second,

requirements become mandatory and enforceable reliability requirements only after

Commission approval and not after any action, or inaction, by an applicable entity.

67. For the same reasons explained above, the Commission disagrees with comments

that Requirement R3 focuses on procedural aspects of the Reliability Standard founded

on the arguments that the requirement related to “how” the relief is provided rather than

“whether” the relief was provided, where the “wrong tools” were used to achieve the

“correct results.” Even if an entity, having violated a Reliability Standard, achieves

39 N. Am. Elec. Reliability Corp., 119 FERC ¶ 61,145, at P 25 (2007).



correct results, the entity’s success should be attributed to a matter of chance and may be

more risky than the operation set forth in the Reliability Standard.

68. IESO’s comment that there should not be two simultaneous “high” risk penalties

assessed to a reliability coordinator who fails to comply with the TLR procedure of

Requirements R1 and R2 is outside the scope of this proceeding. The determination of

monetary penalties for a violation of a requirement is a compliance issue, which is best

addressed in the context of a compliance proceeding.40

69. We do not agree that a violation of Requirement R4 is a specific type of violation

of the INT Reliability Standards as NERC and IESO suggest. Requirement R4 requires a

reliability coordinator to comply with interconnection-wide curtailment procedures

whereas Requirement R5 requires reliability coordinators and balancing authorities to

adhere to INT standards that largely specify interchange scheduling procedures. Failure

to implement curtailment procedures poses a higher reliability risk, since it may place the

Bulk-Power System at risk of cascading outages, than failure to implement scheduling

procedures; therefore, it should receive a “high” violation risk factor.

3. Commission Determination on Violation Severity Levels

70. The ERO’s December 21, 2007 filing included proposed violation severity levels

corresponding to the requirements of IRO-006-4. Violation severity levels, which the

40 We note that section 3.10 of NERC’s Sanction Guidelines addresses multipleviolations related to a single act or common incidence of noncompliance.



ERO or the Regional Entity will apply to establish an initial base penalty range when

assessing a penalty for the violation of a Reliability Standard, constitutes a post-violation

measurement of the degree to which a requirement was violated.41 The Commission

accepts the violation severity levels proposed by the ERO that correspond to the

Requirements of Reliability Standard IRO-006-4.

71. Further, in the Violation Severity Levels Order, the Commission directed the ERO

to submit a compliance filing certifying that it has reviewed each of the violation severity

level assignments for consistency with certain guidelines set forth in that order.42 The

Commission also directed that the ERO either validate the existing violation severity

level designations or propose revisions to specific approved violation severity level

assignments where the ERO determines that such assignments do not meet the specified

guidelines. Consistent with the Violation Severity Levels Order, the Commission now

directs the ERO to review the violation severity levels for IRO-006-4. The ERO must

include in the compliance filing required by Ordering Paragraph (E) of the Violation

Severity Levels Order a certification that it has reviewed each violation severity level

assignment corresponding to the requirements of IRO-006-4 for consistency with certain

41 See N. Am. Elec. Reliability Corp., 123 FERC ¶ 61,284, at P 3 (ViolationSeverity Levels Order), order on reh’g, 125 FERC ¶ 61,212 (2008) (extendingcompliance date).

42 See Violation Severity Level Order, 123 FERC ¶ 61,284 at P 41 and OrderingParagraph (E).



guidelines (specifically, guidelines 2b, 3, and 4), validating the assignments that meet the

guidelines and proposing revisions to those that fail to meet the guidelines.

72. Accordingly, with respect to the violation risk factors and severity levels, we

approve IRO-006-4 as mandatory and enforceable. In addition, we direct the ERO

submit a compliance filing within 60 days that revises violation risk factors to “high” for

Requirements R1 through R4. The Commission approves the proposed violation severity

levels and requires the ERO to submit a compliance filing, as discussed above.

III. Information Collection Statement

73. The Office of Management and Budget (OMB) regulations require that OMB

approve certain reporting and recordkeeping (collections of information) imposed by an

agency.43 The information contained here is also subject to review under section 3507(d)

of the Paperwork Reduction Act of 1995.44 As stated above, the Commission previously

approved, in Order No. 693, Reliability Standard IRO-006, which is the subject of this

supplemental final rule. In the NOPR, the Commission explained that the modifications

to the Reliability Standard are minor; therefore, they do not add to or increase entities’

reporting burden. Thus, in the NOPR, the Commission stated that the modified

43 5 CFR 1320.11.

44 44 U.S.C. 3507(d).



Reliability Standard does not materially affect the burden estimates relating to the earlier

version of Reliability Standard IRO-006 presented in Order No. 693.45

74. In response to the NOPR, the Commission received no comments concerning its

estimate for the burden and costs and therefore uses the same estimate here.

Title: Modification of Interchange and Transmission Loading Relief Reliability

Standards; and Electric Reliability Organization Interpretation of Specific Requirements

of Four Reliability Standards.

Action: Proposed Collection

OMB Control No.: 1902-0244

Respondents: Businesses or other for-profit institutions; not-for-profit institutions

Frequency of Responses: On Occasion

Necessity of the Information: This Supplemental Final Rule approves one modified

Reliability Standard that pertains to transmission loading relief procedures. The

Supplemental Final Rule finds the Reliability Standard just, reasonable, not unduly

discriminatory or preferential, and in the public interest.

75. Interested persons may obtain information on the reporting requirements by

contacting: Federal Energy Regulatory Commission, Attn: Michael Miller, Office of the

45 See Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 1905-07. The NOPR,FERC Stats. & Regs. ¶ 32,632 at P 76-78, provided a detailed explanation why eachmodification has a negligible, if any, effect on the reporting burden.



Executive Director, 888 First Street, NE, Washington, DC 20426, Tel: (202) 502-8415,

Fax: (202) 273-0873, E-mail: <[email protected]>, or by contacting: Office of

Information and Regulatory Affairs, Office of Information and Regulatory Affairs, Attn:

Desk Officer for the Federal Energy Regulatory Commission (Re: OMB Control No.

1902-0244), Washington, DC 20503, Tel: (202) 395-4650, Fax: (202) 395-7285, E-

mail: <[email protected]>.

IV. Environmental Analysis

76. The Commission is required to prepare an Environmental Assessment or an

Environmental Impact Statement for any action that may have a significant adverse effect

on the human environment.46 The Commission has categorically excluded certain actions

from this requirement as not having a significant effect on the human environment.

Included in the exclusion are rules that are clarifying, corrective, or procedural or that do

not substantially change the effect of the regulations being amended.47 The actions

proposed herein fall within this categorical exclusion in the Commission’s regulations.

46 Regulations Implementing the National Environmental Policy Act, OrderNo. 486, FERC Stats. & Regs. ¶ 30,783 (1987).

47 18 CFR 380.4(a)(2)(ii).



V. Regulatory Flexibility Act

77. The Regulatory Flexibility Act of 1980 (RFA)48 generally requires a description

and analysis of final rules that will have significant economic impact on a substantial

number of small entities. The RFA mandates consideration of regulatory alternatives that

accomplish the stated objectives of a proposed rule and that minimize any significant

economic impact on a substantial number of small entities. The Small Business

Administration’s Office of Size Standards develops the numerical definition of a small

business. (See 13 CFR 121.201.) For electric utilities, a firm is small if, including its

affiliates, it is primarily engaged in the transmission, generation and/or distribution of

electric energy for sale and its total electric output for the preceding twelve months did

not exceed four million megawatt hours. The RFA is not implicated by this Final Rule

because the minor modifications and interpretations discussed herein will not have a

significant economic impact on a substantial number of small entities.

VI. Document Availability

78. In addition to publishing the full text of this document in the Federal Register, the

Commission provides all interested persons an opportunity to view and/or print the

contents of this document via the Internet through FERC’s Home Page

(http://www.ferc.gov) and in FERC’s Public Reference Room during normal business

48 5 U.S.C. 601-12.



hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street, NE, Room 2A,

Washington, DC 20426.

79. From FERC’s Home Page on the Internet, this information is available on

eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft

Word format for viewing, printing, and/or downloading. To access this document in

eLibrary, type the docket number excluding the last three digits of this document in the

docket number field.

80. User assistance is available for eLibrary and the FERC’s website during normal

business hours from FERC Online Support at (202) 502-6652 (toll free at 1-866-208-

3676) or e-mail at <[email protected]>, or the Public Reference Room at (202)

502-8371, TTY (202) 502-8659. E-mail the Public Reference Room at

<[email protected]>.

VII. Effective Date and Congressional Notification

81. The Supplemental Final Rule is effective [insert date that is 30 days from

publication in FEDERAL REGISTER]. The Commission has determined, with the

concurrence of the Administrator of the Office of Information and Regulatory Affairs of

OMB, that this rule is not a “major rule” as defined in section 351 of the Small Business

Regulatory Enforcement Fairness Act of 1996.



List of subjects in 18 CFR Part 40

Electric power, Electric utilities, Reporting and recordkeeping requirements

By the Commission.

( S E A L )

Nathaniel J. Davis, Sr.,Deputy Secretary.



Appendix A

NOPR Commenters49

Alcoa Inc. (Alcoa)*

Constellation Energy Commodities Group, Inc. (Constellation)*

Independent Electricity System Operator of Ontario (IESO)*

ISO/RTO Council*

ITCTransmission; Michigan Electric Transmission Company, LLC; and ITC MidwestLLC

Lafayette Utilities and the Louisiana Energy and Power Authority (Lafayetteand LEPA)*

North American Electric Reliability Corp. (NERC)* NRG Companies (NRG)*

Southern Company Services, Inc. (Southern)

Appendix B

Comments in Response to NERC’s September 11, 2008 Filing50

ISO/RTO Council

NRG

Southern

49 An asterisk (*) indicates that the commenter addressed Reliability StandardIRO-006-4.

50 M-S-R Public Power Agency filed a motion to intervene without comments.


Document Content(s)

20130948.DOC..........................................................1-46


130 FERC ¶ 61,032UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Jon Wellinghoff, Chairman;Marc Spitzer, Philip D. Moeller,and John R. Norris.

Modification of Interchange and TransmissionLoading Relief Reliability Standards; and ElectricReliability Organization Interpretation of SpecificRequirements of Four Reliability Standards

Docket No. RM08-7-002

ORDER NO. 713-B

ORDER DENYING REQUEST FOR REHEARING AND CLARIFICATION

(Issued January 21, 2010)

1. The NRG Companies, Electric Power Supply Association, and ConstellationEnergy Commodities Group (collectively, Rehearing Parties) filed a joint request forrehearing and clarification of Order No. 713-A, in which the Commission acceptedrevisions to the North American Electric Reliability Corporation’s (NERC) transmissionload relief (TLR) requirements as set forth in Reliability Standard IRO-006-4.1 In thisorder, we deny rehearing and clarification, as discussed below. While we conclude thatthe concerns raised by the Rehearing Parties regarding a potential conflict between theTLR Procedure and the curtailment priority provisions of the open access transmissiontariff are beyond the scope of the current proceeding, we believe that this issue meritsfurther inquiry and, therefore, are issuing a notice of inquiry proceeding in DocketNo. RM10-9-000 concurrently with this order.

I. Background

2. On December 21, 2007, NERC, the Commission-certified electric reliabilityorganization (ERO), submitted for Commission approval modifications to Reliability

1 Modification of Interchange and Transmission Loading Relief ReliabilityStandards; and Electric Reliability Organization Interpretation of Specific Requirementsof Four Reliability Standards, Order No. 713-A, 126 FERC ¶ 61,252 (2009).


Docket No. RM08-7-002 2

Standard IRO-006-4 (Reliability Coordination – Transmission Loading Relief), known asthe TLR procedure.

3. Reliability Standard IRO-006-4 provides Interconnection-wide transmissionloading relief procedures that can be used to prevent or manage potential or actual systemoperating limit (SOL) or Interconnection reliability operating limit (IROL) violations.2

Reliability Standard IRO-006-4 modifies Reliability Standard IRO-006-3, which theCommission approved in Order No. 693.3 In its December 2007 filing, NERC explainedthat it modified the TLR procedure to “extract” business practices since these elementsare not related to reliability.4 Further, the modified Reliability Standard includes changesdirected by the Commission in Order No. 693 related to the appropriateness of using theTLR procedure to mitigate a violation of an IROL.

4. On July 21, 2008, the Commission issued Order No. 713, which, inter alia,directed NERC to submit a filing explaining one aspect of the TLR procedure. OnSeptember 11, 2008, NERC submitted a responsive filing. On March 19, 2009, theCommission issued Order No. 713-A, which approved Reliability Standard IRO-006-4.In addition, Order No. 713-A directed the ERO to develop a modification to IRO-006-4,pursuant to section 215(d)(5) of the Federal Power Act (FPA).5 In response to commentsregarding competitive concerns and the application of the Interchange DistributionCalculator (IDC),6 the Commission concluded:

2 A SOL is the value (such as MW, MVar, amperes, frequency, or volts) thatsatisfies the most limiting of the prescribed operating criteria for a specified systemconfiguration to ensure operation within acceptable reliability criteria. An IROL is asystem operating limit that, if violated, could lead to instability, uncontrolled separation,or cascading outages that adversely impact the reliability of the Bulk-Power System.

3 Mandatory Reliability Standards for the Bulk-Power System, Order No. 693,FERC Stats. & Regs. ¶ 31,242, order on reh’g, Order No. 693-A, 120 FERC ¶ 61,053(2007).

4 See infra P 12 and accompanying note.

5 16 U.S.C. § 824o(d)(5) (2006).

6 The IDC is a mechanism used by the reliability coordinators in the EasternInterconnection to calculate the distribution of interchange transactions over specificflowgates. It includes a database of all interchange transactions and a matrix of thedistribution factors for the Eastern Interconnection.



The above comments on suggested improvements to the TLRprocedure are beyond the scope of this proceeding, whichpertains to the separation of business practices from theERO’s TLR procedure and implementation of theCommission’s directives set forth in Order No. 693. We note,however, that the ERO indicated in its December 21, 2007filing that it has a three-phase plan to improve the TLRprocedures, and the third phase will consist of “a completeredrafting to incorporate enhancement and changes beyondthe separation of reliability and business practice issues.”Therefore, the phase three proceeding would provide a properforum for commenters to raise their concerns. TheCommission believes that NRG and other commenters raisevalid issues and urges the commenters to raise—and expectsthe ERO to consider—these matters in an appropriateproceeding. We also note that NERC states it is currentlyupdating the IDC to more accurately determine the impacts ofnative load and network service.[7]

II. Request for Rehearing and Clarification

5. The Rehearing Parties argue that the Commission erred in approving IRO-006-4. The Rehearing Parties state that the FPA requires the Commission to find a proposedReliability Standard just and reasonable and not unduly discriminatory or preferential, to“ensure that proposed Reliability Standards are fair and that they do not adversely affectcompetition.”8 They contend that the Commission failed to apply this statutory standard,finding the proposed Reliability Standard just and reasonable notwithstandinginconsistent record evidence. Further, they contend that the Commission accepted theReliability Standard without considering its impact on competition. The RehearingParties also dispute the Commission’s finding that comments relating to competitiveconcerns are beyond the scope, noting that “NERC presented the mandatory TLRreliability rules in this docket.”9 The Rehearing Parties maintain that there is no evidencethat the Commission considered the effect of the proposed Reliability Standard oncompetition, instead relying on NERC’s analysis.

7 Order No. 713-A, 126 FERC ¶ 61,252 at P 21 (footnotes omitted).

8 Request for Rehearing at 4 (citing FPA § 215(d), 16 U.S.C. § 824o(d) (2006)).

9 Id. at 6.



6. The Rehearing Parties next contend that the TLR Reliability Standard violates thecurtailment priorities established in Order Nos. 88810 and 89011 and the pro forma openaccess transmission tariff (OATT), because the standard favors native network loadtransactions over interchange transactions with respect to curtailment priority. They citeto NRG’s comments in the underlying proceeding that point to problems with the IDC,upon which the Reliability Standard relies to determine curtailments.12 The RehearingParties cite sections 13.6 and 14.7 of the Commission’s pro forma OATT for thepropositions that non-firm transmission services must be curtailed before firmtransmission services, and firm point-to-point and network integration transmissionservice customers have an equal priority with the transmission provider’s use of thesystem to deliver Network Resources to its native load.13 They maintain that, because ofits reliance on the flawed IDC, the TLR standard would direct a Reliability Coordinatorto curtail a firm interchange transaction crossing over a constrained flowgate prior tocurtailing a non-firm native network load transaction across the same flowgate. Lastly,the Rehearing Parties point out that the Commission has recognized such flaws in theIDC and has directed NERC to address them.14 According to the Rehearing Parties,earlier reforms to the TLR process and IDC have not remedied flaws that have beenidentified.

7. The Rehearing Parties further contend that in the TLR Order the Commissionacknowledges that the TLR Reliability Standard is discriminatory. They contend that the

10 Promoting Wholesale Competition Through Open Access Non-DiscriminatoryTransmission Services by Public Utilities; Recovery of Stranded Costs by Public Utilitiesand Transmitting Utilities, Order No. 888, FERC Stats. & Regs. ¶ 31,036 (1996), orderon reh’g, Order No. 888-A, FERC Stats. & Regs. ¶ 31,048, order on reh’g, OrderNo. 888-B, 81 FERC ¶ 61,248 (1997), order on reh’g, Order No. 888-C, 82 FERC¶ 61,046 (1998), aff’d in relevant part sub nom. Transmission Access Policy Study Groupv. FERC, 225 F.3d 667 (D.C. Cir. 2000), aff’d sub nom. New York v. FERC, 535 U.S. 1(2002).

11 Preventing Undue Discrimination and Preference in Transmission Service,Order No. 890, FERC Stats. & Regs. ¶ 31,241, order on reh’g, Order No. 890-A, FERCStats. & Regs. ¶ 31,261 (2007), order on reh’g, Order No. 890-B, 123 FERC ¶ 61,299(2008) order on reh’g, Order No. 890-C, 126 FERC ¶ 61,228 (2009).

12 Request for Rehearing at 7 (citing NRG Comments at 12-16).

13 Id.

14 Id. at 8 (citing N. Am. Elec. Reliability Corp., 85 FERC ¶ 61,353 (1998)).



Commission erred in accepting the standard while conceding that the proposed TLRprocess discriminates against certain market participants and that the issues raised by theRehearing Parties are valid.15 They specifically aver that the TLR Reliability Standarddiscriminates against merchant generators and provides an unlawful preference fortransactions by load-serving entities. For example, they explain that the IDC does notinclude power purchases by a host balancing authority in the native network loadcurtailment calculations, because native network load is calculated by taking into accountonly those generation facilities owned by the host balancing authority. Thus, in thisexample, transactions involving independent power producers are curtailed in favor oftransactions involving the host balancing authority.

8. Finally, the Rehearing Parties contend that the Commission erred in not remandingthe TLR Reliability Standard back to NERC. In response to NERC’s estimation that itsefforts to improve the IDC will take two to five additional years, the Rehearing Partiesstate that this “is simply too long for the Commission to wait to address the OATTviolations caused by the existing standard.”16

9. The Rehearing Parties request that the Commission clarify that Order No. 713-Adirects NERC to revise the TLR Reliability Standard to address the issues raised by theRehearing Parties pursuant to section 215(d) of the FPA. Alternatively, the RehearingParties seek rehearing and request the Commission to reject the Reliability Standard asdiscriminatory and direct NERC to immediately develop a TLR process that addressesthe competitive concerns raised.

III. Discussion

10. We deny the Rehearing Parties’ request for rehearing and clarification. While theRehearing Parties reiterate the concerns raised in their earlier rulemaking comments, theyprovide a limited response to the Commission’s conclusion that the issues raised arebeyond the scope of the immediate rulemaking proceeding. Namely, the RehearingParties claim that “[b]ecause NERC presented the mandatory TLR reliability rules in thisdocket, there is no justification for finding that the Rehearing Parties’ concerns are betteraddressed in some other proceeding or that the Commission is not required to addressdiscrimination claims when approving a mandatory Reliability Standard.”17

15 Id. at 9, 10 (citing Order No. 713-A, 126 FERC ¶ 61,252 at P 21).

16 Id. at 11.

17 Id. at 6.



11. We are not persuaded by the Rehearing Parties’ argument. In Order No. 693, theCommission approved Reliability Standard IRO-006-3 (Reliability Coordination –Transmission Loading Relief).18 This approval made the TLR procedures mandatoryunder section 215 of the FPA. Reliability Standard IRO-006-3 sets forth the entire TLRprocess, including the application of the IDC.

12. NERC’s submission of the revised TLR procedure, as IRO-006-4, was limited inscope. NERC explained that the filing addressed two specific matters, namely, theseparation of business practices that were “transferred” to a North American EnergyStandards Board (NAESB) business practice document19 and a prohibition regarding theuse of the TLR procedure to mitigate an actual IROL violation. All other provisions ofthe modified TLR procedure, previously approved by the Commission in Order No. 693,remain the same. The Commission disagrees with the Rehearing Parties that all issuesregarding any aspect of a previously-approved Reliability Standard must be addressedwhen the Commission is presented with narrowly tailored modifications to the standard.Thus, the Commission upholds its earlier conclusion that comments regardingimprovements to the Reliability Standard to address certain competitive issues arebeyond the scope of the immediate proceeding. Indeed, if the Commission were to grantthe Rehearing Parties’ requested relief of remanding Reliability Standard IRO-006-4, thepreviously approved version of the TLR procedure, IRO-006-3, would remain in effectand enforceable, which would not resolve the competitive issues raised by the RehearingParties.

13. Further, we disagree with the Rehearing Parties’ claim that the Commission erredin failing to reject Reliability Standard IRO-006-4 “even after conceding that theproposed TLR process discriminates against certain market participants ….”20 Contraryto the Rehearing Parties’ characterization, the Commission did not “concede” or, for thatmatter, make any substantive finding or conclusion on the competitive issues raised bycommenters. Rather, consistent with the conclusion that the matters raised were beyondthe scope of the immediate proceeding, the Commission stated:

18 See Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 960-964.

19 The Commission approved the NAESB TLR standard, WEQ-008, to coincidewith the effective date of Reliability Standard IRO-006-4. See Standards for BusinessPractices and Communication Protocols for Public Utilities, Order No. 676-C, FERCStats. & Regs. ¶ 31,274, at P 7 n.11, P 9, 80 (2008); see also Order No. 713, 124 FERC¶ 61,071 at P 8.

20 Request for Rehearing at 9.



[NERC’s] phase three proceeding would provide a properforum for commenters to raise their concerns. TheCommission believes that NRG and other commenters raisevalid issues and urges the commenters to raise—and expectsthe ERO to consider—these matters in an appropriateproceeding.[21]

This statement is consistent with the Commission’s approach set forth in Order No. 693,in which the Commission explained that when a commenter suggests improvements to aReliability Standard, a Commission directive that the ERO address the comments “doesnot direct any outcome other than that the comments receive consideration.”22 Merelystating that the concerns are “valid” while directing that the ERO consider the commentsis not properly characterized as a concession or determination by the Commission.

14. For the same reasons, the above statement does not support the Rehearing Parties’request that the Commission clarify that the ERO must address the Rehearing Parties’concerns within a set time period and fix the IDC or eliminate reliance on the IDC tomake curtailment decisions.23 The Rehearing Parties suggest that the statement in theintroduction to Order No. 713-A, “pursuant to section 215(d)(5) of the FPA, theCommission directs NERC to develop modifications to Reliability Standards IRO-006-4,” mandates that NERC address the competitive issues with a certain result and in a settime period.24 Again, consistent with our approach in Order No. 693, the Commission(urged commenters to raise and) directed NERC to “consider” these issues in anappropriate proceeding, but did not mandate a particular result.25

15. Thus, the Commission in Order No. 713-A properly determined that the modifiedReliability Standard IRO-006-4, at issue in this proceeding, is just and reasonable, not

21 Order No. 713-A, 126 FERC ¶ 61,252 at P 21.

22 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 188.

23 Request for Rehearing at 12.

24 Order No. 713-A, 126 FERC ¶ 61,252 at P 1.

25 In contrast, where the Commission directed the ERO to develop a modificationto IRO-006-4, the Commission clearly stated, “Accordingly, pursuant to section215(d)(5) of the FPA, the Commission directs the ERO to develop a modification ofRequirement R1.1 with respect to the term “alone,” consistent with this discussion.” Id.P 36.



unduly discriminatory or preferential, and in the public interest. Accordingly, we denythe Rehearing Parties’ request for rehearing and clarification.

16. While the issues raised by Rehearing Parties related to the TLR procedure and thecurtailment priorities are beyond the scope of this immediate rulemaking proceeding, webelieve that certain issues raised by Rehearing Parties merit further inquiry. Accordingly,we are issuing a notice of inquiry (i.e., NOI) proceeding in Docket No. RM10-9-000concurrently with this order with respect to the TLR procedure and its interplay with thecurtailment priority provisions of the OATT.26

The Commission orders:

The Rehearing Parties’ request for rehearing and clarification is hereby denied, asdiscussed in the body of this order.

By the Commission. Commissioner Norris voting present.

( S E A L )

Kimberly D. Bose,Secretary.

26 Transmission Loading Relief Reliability Standard and Curtailment Priorities,130 FERC ¶ 61,033 (2010).


Document Content(s)

RM08-7-002.DOC........................................................1-8


legacyexternalwebsitefiles.balch.com · docket no. rm08 -7-000 2 (202) 50 2-6125...

Documents